China’s economic growth is the lowest in a decade. A trade war with the U.S. drags on with no end in sight. In this uncertain environment, the country’s largest-ever batch of college graduates is hitting the job market.
Even the best and brightest among the record 8.3 million graduates this year are struggling to land the prestigious jobs they had hoped for. More than 20 students from top Chinese and overseas universities told Bloomberg News they’re pessimistic about the job market. Some have deferred graduation or taken internships rather than jobs because they can’t find the right role. Two said companies have withdrawn offers.Among them is David Yang, who was set to graduate last week with a finance degree from Tsinghua University — China’s No. 1 school according to Times Higher Education’s world university rankings — and start working at an asset management firm. The job fell through because the company didn’t have enough headcount. Yang has delayed his graduation to 2020 and will spend the coming year as an intern at another company.
Jobs are a key issue for China’s leadership, which is extremely sensitive to any social unrest that large-scale unemployment could trigger. While official figures show employment is holding up, data from recruiters show positions for fresh graduates have fallen and popular sectors including technology and finance have come under pressure.
Openings for graduates fell 13% this spring while job seekers also declined by 5%, according to online recruiter Zhaopin Ltd. The ratio of job vacancies to job seekers overall dropped to 1.68 in the first three months of this year, the lowest level since early 2015, when Zhaopin began releasing the data.
“China’s job market will continue to see downward pressure next year as the country’s economy keeps slowing down and the China-U.S. trade war is unlikely to end before the 2020 U.S. presidential election,” said Hong Kong-based Bloomberg economist Qian Wan. “Finance jobs might improve next year as the financial industry keeps opening up, tech firms could potentially see more headwinds.
High-paying jobs, which the government relies on to foster a shift to consumption-based growth, are also harder to come by. The proportion of entry-level jobs paying more than 10,000 yuan ($1,450) a month tracked by the Mastercard Caixin BBD China New Economy Index fell to 8.7% in May, the lowest in about two years. The measure looks at human capital and technology-intensive industries that the government has identified as strategic. About 10% of graduates from the School of Economics at Fudan University, a major recruiting pool for top financial firms in China, say they might take a gap year after failing to secure a job upon graduation. That’s according to Laura Wang, an instructor whose responsibilities include career guidance. Wang said she hasn’t seen this happen in the past five years.
In June, the employment sub-index of China’s official purchasing managers’ index fell to the lowest level since 2009 in the manufacturing sector, and to the worst since early 2016 in non-manufacturing. The nation established a group headed by a vice-premier in May that aims to boost jobs for college graduates and encourage them to go to local regions, join the military or start a business.
New job seekers are lowering their sights as the uncertain economic backdrop exacerbates downsizing in some sectors like the technology industry, which has started to cut costs as China’s long-running tech boom shows signs of weakening. That could put many Gen Z college students in a similar position as millennials who graduated during the U.S. recession — risking a lifelong impact on their earning potential and careers prospects.
Wang Jinglong, who studied computer science at Tsinghua, said the job market is more competitive this year. Still, the decision by some to sit this year out reflects an optimism that the worst will pass. China’s labor market supply is shrinking every year, and fallout from the trade war has peaked, said Business Big Data’s Chief Economist Chen Qin.
“The job market next year largely depends on external factors, mainly the trade war,” Chen said. “I think it will rebound a bit.”