China's unemployment problem: College grads face a daunting job market

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China has an unemployment problem. Why nearly 20 percent of young job-seekers can’t land a job.

Take a look at some of the most popular slang words on the Chinese internet lately, and you get a sense of the mood — and some of the problems young people are facing.

躺平 | tang ping | lying flat: checking out from the rat race to pursue a more low-key life;

内卷 | nei juan | fierce competition in society and at work;

摆烂 | bai lan | let it rot: giving up and not trying to fix a bad situation.


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Dissatisfaction among the young generation in China has spiked recently, and it’s not hard to see why. Chinese students face intense competition at school and at universities — and lately they have also spent stretches of time in strict covid lockdowns, many stuck in tight dorm rooms. Worse, perhaps: The payoff is increasingly elusive — it has become harder and harder to find a job.

New data released on Saturday by China’s National Bureau of Statistics shows that youth unemployment hit 19.3 percent in June. It’s the highest level since the data was first made public four years ago; back then, the figure was as low as 9.6 percent.

Nearly 11 million newly minted college graduates — the Class of 2022 — have joined this daunting job market. “I found that finding a job is really hard right now, especially finding a job that suits you and is satisfying,” said Chen Huizhi, a 2021 graduate who studied communications in London before returning to Beijing during the pandemic. Chen, who spoke to Grid on the condition of anonymity and is using a pseudonym, landed a new job recently, but found the search anxiety-inducing. She said, “It’s even harder than finding a boyfriend.”

After a relatively smooth recovery from the initial stages of the pandemic, China’s economy has slowed to a crawl as a result of the rolling covid lockdowns across the country. GDP growth dipped to 0.4 percent in the second quarter of the year, far below the government’s annual target of 5.5 percent. But the reasons for China’s high youth unemployment extend beyond the toll of covid to longer-standing political issues that aren’t easy to resolve.

The data amounts to a reckoning for the party, which has been able to deliver on the promise of greater prosperity for previous generations. As Eli Friedman, a Cornell sociologist who studies labor issues in China, wrote in China File recently, “While this will not automatically translate to political dissent, high levels of youth unemployment mean the generation-long bargain will need to be renegotiated on different terms.”


Behind the numbers: China’s over- and undereducation problem

Three big economic issues help explain why so many Chinese young people are out of a job right now. The first has been a factor for more than a decade — China simply has too many college graduates for the economy to absorb.

“China’s both overeducated and undereducated,” said Zak Dychtwald, CEO of Young China Group, a consulting firm that does market research on youth in China. Far more young people in China pursue higher education today than two decades ago: In 1998, only 1 million students gained admission to Chinese colleges; nearly 11 million graduated this year.

And in the meantime, the Chinese job market has lagged. “It’s really hard over a 20-year span to change your whole economy at pace with the amount of young people getting educated,” Dychtwald told Grid.

On the one hand, for college graduates seeking white-collar jobs, there aren’t enough openings. Only 0.71 jobs were available for each graduate in the first quarter of the year, according to Zhaopin, a Chinese job recruitment site. On the other side of the job market, where less-educated applicants might find work, China doesn’t have enough people trained in advanced manufacturing.

As Chang Che put it in SupChina, “For decades, the expansion of higher education alongside the manufacturing economy left Chinese as cheap laborers or scholarly hopefuls. Now it needs something in the middle.”

Chinese leaders are working on developing that middle path, well aware that training more young people to work in industries such as semiconductor and aircraft manufacturing will be critical to China’s future growth. In recent years, the government has invested in vocational programs, driving millions more young people down that path since 2019.

But the mismatch between the jobs that are available and Chinese students’ educational training remains significant. And it won’t be resolved overnight.

A problem with “common prosperity”

On top of the over/undereducated issue, China’s job market suffered a different setback last year. Under the broad umbrella of reducing inequality, the government began rolling out a raft of new regulations on companies — a campaign that escalated when Chinese President Xi Jinping gave a speech on what he called “common prosperity” last summer. “Common prosperity” would be the linchpin of his government’s domestic policy — and a core element would involve fighting inequality. One of the key targets of the “common prosperity” campaign: Chinese corporations that were deemed to have grown too greedy. That led to a crackdown that has hurt the job market.

China’s technology industry has been hit particularly hard. Chinese regulators have fined tech giants including Alibaba and Tencent billions of dollars for monopolistic practices. In the wake of the crackdown, tech’s exuberant growth has been curtailed. “Many private internet companies are firing more than they hire,” said Tianlei Huang, a research fellow at the Peterson Institute of International Economics.

Some new regulations have gone even further, all but decimating certain industries. The private education sector, for example, was left in ruin after the government announced a ban on for-profit tutoring with the aim of equalizing education opportunities.


“Tutoring used to be a major employer for recent college graduates, and that sector is basically gone after the crackdown last year,” said Houze Song, an economist at the Paulson Institute. A November report from Beijing Normal University found that the crackdown on the sector put 3 million jobs at risk. Without these popular post-grad destinations, a whole cohort of job seekers has had to look elsewhere.

Amid the turbulence, many more recent graduates are seeking out stable government jobs. More than 2 million people registered to take China’s civil service exam in December, in hopes of securing public service jobs that provide lower wages but a higher degree of job security. And job-seekers have also been looking increasingly to state-owned companies.

“In the past two years, central government state-owned enterprises have been many people’s preference, because the pandemic made business very unstable,” Chen said. “So everyone prefers jobs with a high level of stability.” Meanwhile, Chen herself said she feels like an exception. “Because I don’t like the 9-to-5 life, I always choose to do things that are really challenging and unstable,” she said.

Zero-covid — and the larger economic slowdown

Above all else, this “most difficult job-hunting season,” as many are calling it, is a product of the pandemic itself and the huge toll China’s zero-covid policy has taken on the economy.

A series of rolling lockdowns has delivered crushing blows to businesses across the country. Grid reported recently on the lingering economic effects of Shanghai’s two-month lockdown on everything from factories to coffee shops. Small businesses are another big source of jobs for young people, and they’ve been hit hard.


“Many of those small businesses may have already died,” said Huang. “Many may be having a serious cash flow crisis, and survival is their No. 1 priority for now. No wonder that they are either providing fewer job openings or suspending recruitment plans until conditions turn more favorable.”

Meanwhile, the pandemic has increased the number of applicants vying for positions. Back in 2020, the youth joblessness numbers didn’t look so bad — partly because the Chinese government required universities to expand graduate school admissions as a way to help students delay entering the job market until the economy had recovered. But now those students have graduated and are facing an economy that is looking worse, not better. And that, Song told Grid, has compounded the problems. “This is in large part the 2020 youth unemployment problem,” he said, “postponed to today.”

A bleak outlook

China’s political leadership has acknowledged the problem. In an emergency meeting in late May, Premier Li Keqiang told 100,000 local officials that certain economic indicators were trending worse than 2020 and called on them to help create more job opportunities.

In some cases, local governments have heeded the call. Shanghai, for instance, has asked state-owned enterprises in the city to reserve half of their openings for the latest crop of graduates. And the government in Yunnan province is offering a $7,500 subsidy for recent graduates who take jobs in rural areas.

But Song said these measures don’t add up to much. And with China’s economy only limping along, and the government continuing to pursue the same zero-covid strategy, the youth unemployment issue is unlikely to disappear anytime soon.


“As long as zero-covid in its current form continues to exist, companies faced with great uncertainties will continue to avoid large-scale recruitment, and China’s unemployment problem will remain,” said Huang. “What China needs to do now is to stabilize expectations in the economy. Only when expectation is stabilized, companies will resume recruiting.”

If the government doesn’t turn the tide, some scholars warned that the problems facing the Class of 2022 could become a larger political problem. “Unemployed workers could bring turmoil and pose a significant threat to urban centers’ social and political order,” Ho-Fung Hong, a sociologist at Johns Hopkins University, wrote in China File.

Even for many who have jobs, the picture remains grim. “Everyone is really exhausted these days,” said Chen. “The pressure at work in China, especially in Beijing, is really high.” And the salaries are low, she said. It’s these issues — along with the struggle to find work for many — that have made those phrases on Chinese social media go viral.

“I think ‘let it rot’ is a complaint from everyone’s hearts, that we aren’t very satisfied with the current situation,” she said. “Because you don’t have a way to solve the situation, the only thing you can do is complain. But the next day, life has to go on, and you still have to go to work.” Or — in the case of millions of young Chinese — you have to keep looking for work.

Cleo Li-Schwartz contributed reporting. Thanks to Lillian Barkley for copy editing this article.

  • Lili Pike
    Lili Pike

    China Reporter

    Lili Pike is a China reporter at Grid focused on climate change, technology and U.S.-China relations.