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Friday, February 27, 2009      East-Asia-Intel.com

China's educated unemployed skyrocketing

Millions of students, who have played such an important part in China’s modern revolutionary history, are going back to a final semester after the Chinese New Year with poor, if any, prospects for employment.

Job seekers read job listings at a job fair in Beijing, on Feb. 8, 2009. Thousands have been attending job fairs in the city after the lunar new year break.   AP/Andy Wong

  

Diploma mills and the older, more prestigious universities are grinding out some 7.9 million graduates this year. But only an estimated 70 percent of last year’s class found jobs of any kind. More than a million are still searching, often taking menial employment rather than return to their families, often in impoverished rural areas.

In the back of everyone’s mind is the memory of just 20 years ago, when the Chinese Communist Party deployed tanks to crush protests by disgruntled students, many of them facing unemployment, in Tiananmen Square.

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Today the country is facing the same sort of volatile mix of rising unemployment and economic gloom that sparked the 1989 mass pro-democracy marches. But it is particularly frustrating as it comes at the end of the dramatic export-led boom in many of the coastal cities.

Just as it did after that crackdown, the party is trying to rescue the economy by pumping vast amounts of money into infrastructure projects like roads, railways, airports and low-rent housing that have the potential to lift growth. In November, Beijing announced a stimulus package of 4 trillion Yuan [$585 billion] to meet the cutbacks in exports due to the effects of the global economic decline.

But the World Bank says Beijing’s planned fiscal and monetary measures will be insufficient to restart growth unless accompanied by broader social welfare spending. China has neglected that whole part of the political economy during the two decades of boom. But even were Beijing to adopt such a program, it is far from clear whether it has the structure — especially with local Communist Party and government cadre dogged with inefficiency and corruption — to implement such a program in a form rapid enough to be an economic stimulus.

Actually, the oversupply of students ballooned after 1999 when China erected a bevy of colleges in an effort to produce the scientists and managers it needed for a 21st-century economy. It was also seeking to absorb a demographic bulge of teenagers born in the post-Cultural Revolution baby boom after 1976.

Enrollment rose from 3 percent of college-age students in the 1980s to 20 percent today. Despite this transformation, only 6 percent of the population now holds college degrees. But these graduates expect elite jobs, as do their relatives who often make great sacrifices to foot their tuition bill.

Chinese companies, particularly in the export sector, and including such iconic names as Lenovo, the company that took over IBM’s PC tag and business, are laying off employees.

A sign of the desperation was an article last month in China Daily, the Communist Party publication for foreigners, reporting that 1,000 students had been caught cheating on the civil service exam. The students were among 775,000 competing for 13,500 government job openings.

Some 670,000 small- and medium-size enterprises in China, many of them labor-intensive companies based in the manufacturing hubs of the coastal regions, have folded. The Ministry of Human Resources and Social Security estimated that more than 10 million migrant workers had lost their jobs, according to Outlook Magazine, published by the official news and intelligence agency, Xinhua.

"We’re entering the peak of mass incidents," Huang Huo, Xinhua’s bureau chief in the southwestern metropolis of Chongqing, told the magazine. "In 2009, Chinese society may face more conflicts and clashes that will test even more the governing capabilities of all levels of the party and the government".

Government unemployment figures are ludicrously unreflective of the growing unemployment as the growth rate of the economy dips sharply. But when a two-day job fair was held in Beijing, more than 40,000 tickets were sold demonstrating how short employment opportunities are in many big Chinese cities. Many international companies did not bother putting up booths this year.

"Faced with the spreading international financial crisis, our country’s employment situation is extremely grim," Premier Wen Jiabao told the State Council, or cabinet, in an emergency meeting convened to discuss the job marketing in early January. "We must make the employment of higher education graduates a priority," he was quoted as saying on the government’s official website (www.gov.cn).

Weiguo Yang, assistant dean of the school of labor and human resources at Renmin University in Beijing, said he expects most graduates will leave Beijing in search of work in smaller provincial centers. The government is offering to pay off student loans for graduates willing to either work in rural areas or join the military.



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