China’s economy is often times spoken of in such a way that it would seem to grow forever. But nothing lasts forever, and that fact has become apparent where as China’s economy begins to “slow,” that Chinese students are now unable to find work after graduation according to reports:
Downward pressure on the economy will impact China’s job market, state officials warned last month as data has shown gross domestic product expanded at the slowest clip since 1990. And while the overall job market remains stable, it faces a troubling deterioration: college graduates are struggling to find jobs.
Wang Xiangtong’s three-month internship with Hill & Knowlton Strategies in Beijing will be terminated at the start of March, he told the Financial Times.
Wang graduated from Scotland’s Glasgow University in 2018 with a masters degree in management, still considers his educational achievement and a brief internship as rewarding. Many of the companies he applied to in mainland China did not respond.
“All of the positions I applied for are relevant to what I studied and I fit their job descriptions so I thought I’d at least get a reply from them. But many of them didn’t even give me an interview opportunity,” he said. “There are more and more graduates with masters degrees and the market is only so big. We’ll have to put up a bloody fight [to get a job].”
China’s economic woes and trade tensions with the US have sent exports and imports tumbling in December, while declining factory orders warned of a further slowdown throughout the first half of 2019 and more job losses.
The slowdown effect is now affecting graduates from top universities, said analysts. These young entrepreneurs are discovering that finance and tech companies across the country are not hiring, but rather cutting workers.
Another graduate student at a prestigious Beijing University told the Financial Times: “I feel the job market is increasingly narrow for students like me, given that a historical number of us are graduating. I also think employers have decreased or stopped hiring.” She said a state-owned company recruited ten students in her class last year but this year is only taking one.
Norman Zhou, head of recruitment process outsourcing for Korn Ferry China, a hiring agency, said: “As China’s economy goes through a transition and faces downward pressure, companies now operate in a more uncertain environment and hire more conservatively from campus.”
As a result, Beijing is becoming increasingly worried that the economic slowdown is triggering a glut of graduates who cannot find jobs. The communist government recently introduced new policies to help this year’s graduates find work. It also launched broad policies to thwart lay-offs at companies.
Earlier this month Beijing said it has introduced tax breaks for small businesses operated by graduates, as the government desperately injects fiscal stimulus to boost spending and offset an economic downturn.
Officials from the labor ministry told state media that there are a “record number of graduates” — 8.34 million, or a 1.7% increase over the previous year, who added to the “large employment pressure” the country is facing.
Graduates entering the job market in 2018 have been hit by not only the trade war but also forced deleveraging in the financial sector, which has dramatically decreased the number of jobs available.
A new survey by China Market Research Group of around 40 graduate-hiring companies discovered that 80% were not increasing headcount in 2018. More than half of the firms decreased their opening, with the banking industry seen the brunt of the hit.
“The banking sector was the one that hired the most people; now [the banks have] been hit by regulations [governing the finance sector] since last May, and they are automating more jobs,” said Cui Ernan, analyst at research firm Gavekal Dragonomics. “The impact on graduates has been big.”
The contraction in tech and finance jobs is part of a much longer-term cycle after years of exponential growth, analysts said, which has now forced companies to be more conservative about hiring additional staff.
“The technology space, especially online delivery services, has grown explosively in recent years but is now deteriorating because of a consumption slowdown,” said Charles Yue, economist at investment bank CICC. “There’s a lot of pressure in the high-end graduate market and on the overall labour market.”
The key risk is that if Beijing does not solve the employment challenge newly minted graduates face, and with trade war likely to escalate this is unlikely, it would upset the middle class potentially resulting in a middle-class insurrection. (source, source)