College-Educated Chinese Feel Job Pinch
Oakley Qiao had every reason to feel confident when he began his job hunt last September. He was a student at one of China’s top graduate business schools. He already had a few years of work experience. Students applying for jobs at the same time the previous year had gotten two or three offers by the winter, sometimes for a starting salary 20 times the average Chinese annual income.
But on Tuesday, Mr. Qiao walked away empty-handed from the campus of Peking University to take a train northeast to his frigid hometown.
Most of his 100 classmates are in the same straits on the eve of the Lunar New Year holiday, which begins Monday, even though the school had invited recruiters to the campus every week since the fall. Mr. Qiao said he had handed out résumés to more than 50 companies.
“Everyone’s anxious,” he said as he sat in a campus cafe the day before leaving. “The companies who come to the job fairs, they just come to give presentations, not to offer jobs.”
As this country lumbers into the Year of the Ox, a frisson of anxiety is rippling through a generation of Chinese who had grown up thinking that economic prosperity was guaranteed them. The great boom in urban middle-class wealth over the past decade and a half is slowing because of the global financial crisis, and the job market for college-educated Chinese, even those with degrees from top universities here and abroad, has tightened.
In China, the economic downturn hit the export industry first, and factories have been shutting down and putting migrant workers out on the street for months. Now, Chinese white-collar businesses are starting rounds of layoffs, slashing salaries and cutting the year-end bonuses that employees highly prize.
Lenovo Group, the world’s fourth biggest computer maker, said this month it would lay off 11 percent of its global work force and sharply cut executives’ pay. China Eastern Airlines, a state-owned enterprise that is receiving $1 billion in government bailout money, said it would cut the monthly salary of some managers by up to 30 percent.
So worrisome has the situation become that some students at Peking University, one of China’s most prestigious, are even talking about joining the army or becoming butchers. (A well-known alumnus recently made a fortune opening pork shops) Last year, 10,000 college students joined the military, a much higher number than in previous years, according to the official newspaper of the People’s Liberation Army.
The anxiety level of the ruling Communist Party, whose legitimacy is pegged to maintaining economic growth, is rising in lockstep with that of the frustrated workers and job seekers. On Monday, Prime Minister Wen Jiabao said at a cabinet meeting that “this year’s employment situation is very grave,” according to a government report. Earlier, the government ordered state-owned companies not to lay people off.
“I don’t recall any period just before the new year when so many people were very anxious about their job security,” said Bai Chong-en, chairman of the economics department at the Tsinghua University School of Economics and Management.
Labor disputes and protests surged last year, as laid-off workers took to the streets of factory cities to demand back pay owed to them. Senior officials are predicting that unrest will continue in 2009, and that the economic situation could lead to a spike in the crime rate.
“Under the current situation, new social conflicts will be created nonstop,” Chen Jiping, deputy secretary general of the Communist Party’s central political and legislative affairs committee, said this month in Outlook, a magazine published by Xinhua, the state news agency.
The Chinese government reported Thursday that the growth rate for the final quarter of last year fell to 6.8 percent, bringing the rate for the full year down to 9 percent, the slowest pace in at least six years. In 2007, the economy expanded at a roaring 13 percent clip. Analysts say growth could slow to 5 or 6 percent this year, which would be the slowest pace for more than a decade.
Reliable unemployment statistics are hard to come by. The official registered urban unemployment rate for the end of 2008 was 4.2 percent, up from 4 percent in 2007; it was the first time the official rate had risen after five consecutive years of decline.
“The figure looks all right, but the real situation could be much more serious, as migrant workers and newly graduated college students were not included in the government count,” Tang Min, deputy secretary of the China Development Research Foundation, told Xinhua.
The Chinese Academy of Social Sciences, a respected research organization, did a study last year that put the urban unemployment rate at 9.4 percent. That number included migrant workers in the cities. The group did not do any studies with the same methodology for previous years, so there are no comparative numbers.
About 670,000 businesses shut down and 6.7 million jobs “evaporated” last year because of the economic downturn, Chen Quansheng, an adviser to the Chinese cabinet, said in a magazine published by The People’s Daily, the Communist Party’s mouthpiece.
Mr. Wen and other Chinese leaders now say that the economic downturn had shown that China is too dependent on an export economy, and that domestic spending should be encouraged to wean China off that reliance. But the widening uncertainty over jobs will most likely prompt the consumer class in China to save its money. To stimulate spending and help alleviate financial worries, the government announced Wednesday that it would spend $123 billion by 2011 to establish universal health care.
This month, the Ministry of Civil Affairs announced that it would dole out $1.3 billion to 74 million people as a one-time living subsidy. The ministry said the money would be given out before the Lunar New Year.
In recent weeks, white-collar Chinese workers have grown increasingly worried about whether they will get the annual bonus that companies often hand out before the weeklong holiday. Tianji.com, a business networking Web site, conducted a recent online survey in which nearly half of 4,000 respondents said they had little or no hope of getting a bonus this year.
Arthur Kroeber, the managing director of Dragonomics, an economic research consultancy in Beijing, said companies looking to lower costs would probably resort to cutting wages rather than jobs. His prediction is consistent with a government order mandating state-owned companies not to lay off workers, presumably to maintain social stability.
“The true scope of the employment problem will not be clear until the middle of this year,” Mr. Kroeber said.
Though they might not have begun laying off workers yet, many companies have put in place a hiring freeze, leaving many job seekers in limbo.
At the Beijing train station on Monday, a young man named Dong Shiwei who graduated last spring from a business college in Dalian waited in line to buy a ticket home for the holiday. Unable to find a white-collar job here, Mr. Dong has had to work at a fast-food restaurant for $220 a month, less than the average monthly income.
“Finding a job at the moment is really hard,” he said. “I’m not very hopeful. The wages are really low, much lower than I expected.”
The plight of college graduates is expected to get worse because Chinese universities are increasing their enrollments each year. Furthermore, the ranks of overseas Chinese who are returning to look for work are swelling because of the recession in the United States and Europe.
Of 5.59 million college graduates in 2008, an estimated 27 percent were unable to find jobs by the end of the year, according to the Chinese Academy of Social Sciences.
Though Chinese leaders are nervous about the mounting unemployment problems, some parts of the government are benefiting. The People’s Liberation Army, a force of 2.3 million, has had increasing success in recruiting college students through the promise of large cash stipends. And last November, nearly one million students took the civil service exam to compete for government jobs, a jump of 25 percent over the previous year.
For the students, that meant the odds were dismal: every job opening in the government had an average of 78 applicants.
But on Tuesday, Mr. Qiao walked away empty-handed from the campus of Peking University to take a train northeast to his frigid hometown.
Most of his 100 classmates are in the same straits on the eve of the Lunar New Year holiday, which begins Monday, even though the school had invited recruiters to the campus every week since the fall. Mr. Qiao said he had handed out résumés to more than 50 companies.
“Everyone’s anxious,” he said as he sat in a campus cafe the day before leaving. “The companies who come to the job fairs, they just come to give presentations, not to offer jobs.”
As this country lumbers into the Year of the Ox, a frisson of anxiety is rippling through a generation of Chinese who had grown up thinking that economic prosperity was guaranteed them. The great boom in urban middle-class wealth over the past decade and a half is slowing because of the global financial crisis, and the job market for college-educated Chinese, even those with degrees from top universities here and abroad, has tightened.
In China, the economic downturn hit the export industry first, and factories have been shutting down and putting migrant workers out on the street for months. Now, Chinese white-collar businesses are starting rounds of layoffs, slashing salaries and cutting the year-end bonuses that employees highly prize.
Lenovo Group, the world’s fourth biggest computer maker, said this month it would lay off 11 percent of its global work force and sharply cut executives’ pay. China Eastern Airlines, a state-owned enterprise that is receiving $1 billion in government bailout money, said it would cut the monthly salary of some managers by up to 30 percent.
So worrisome has the situation become that some students at Peking University, one of China’s most prestigious, are even talking about joining the army or becoming butchers. (A well-known alumnus recently made a fortune opening pork shops) Last year, 10,000 college students joined the military, a much higher number than in previous years, according to the official newspaper of the People’s Liberation Army.
The anxiety level of the ruling Communist Party, whose legitimacy is pegged to maintaining economic growth, is rising in lockstep with that of the frustrated workers and job seekers. On Monday, Prime Minister Wen Jiabao said at a cabinet meeting that “this year’s employment situation is very grave,” according to a government report. Earlier, the government ordered state-owned companies not to lay people off.
“I don’t recall any period just before the new year when so many people were very anxious about their job security,” said Bai Chong-en, chairman of the economics department at the Tsinghua University School of Economics and Management.
Labor disputes and protests surged last year, as laid-off workers took to the streets of factory cities to demand back pay owed to them. Senior officials are predicting that unrest will continue in 2009, and that the economic situation could lead to a spike in the crime rate.
“Under the current situation, new social conflicts will be created nonstop,” Chen Jiping, deputy secretary general of the Communist Party’s central political and legislative affairs committee, said this month in Outlook, a magazine published by Xinhua, the state news agency.
The Chinese government reported Thursday that the growth rate for the final quarter of last year fell to 6.8 percent, bringing the rate for the full year down to 9 percent, the slowest pace in at least six years. In 2007, the economy expanded at a roaring 13 percent clip. Analysts say growth could slow to 5 or 6 percent this year, which would be the slowest pace for more than a decade.
Reliable unemployment statistics are hard to come by. The official registered urban unemployment rate for the end of 2008 was 4.2 percent, up from 4 percent in 2007; it was the first time the official rate had risen after five consecutive years of decline.
“The figure looks all right, but the real situation could be much more serious, as migrant workers and newly graduated college students were not included in the government count,” Tang Min, deputy secretary of the China Development Research Foundation, told Xinhua.
The Chinese Academy of Social Sciences, a respected research organization, did a study last year that put the urban unemployment rate at 9.4 percent. That number included migrant workers in the cities. The group did not do any studies with the same methodology for previous years, so there are no comparative numbers.
About 670,000 businesses shut down and 6.7 million jobs “evaporated” last year because of the economic downturn, Chen Quansheng, an adviser to the Chinese cabinet, said in a magazine published by The People’s Daily, the Communist Party’s mouthpiece.
Mr. Wen and other Chinese leaders now say that the economic downturn had shown that China is too dependent on an export economy, and that domestic spending should be encouraged to wean China off that reliance. But the widening uncertainty over jobs will most likely prompt the consumer class in China to save its money. To stimulate spending and help alleviate financial worries, the government announced Wednesday that it would spend $123 billion by 2011 to establish universal health care.
This month, the Ministry of Civil Affairs announced that it would dole out $1.3 billion to 74 million people as a one-time living subsidy. The ministry said the money would be given out before the Lunar New Year.
In recent weeks, white-collar Chinese workers have grown increasingly worried about whether they will get the annual bonus that companies often hand out before the weeklong holiday. Tianji.com, a business networking Web site, conducted a recent online survey in which nearly half of 4,000 respondents said they had little or no hope of getting a bonus this year.
Arthur Kroeber, the managing director of Dragonomics, an economic research consultancy in Beijing, said companies looking to lower costs would probably resort to cutting wages rather than jobs. His prediction is consistent with a government order mandating state-owned companies not to lay off workers, presumably to maintain social stability.
“The true scope of the employment problem will not be clear until the middle of this year,” Mr. Kroeber said.
Though they might not have begun laying off workers yet, many companies have put in place a hiring freeze, leaving many job seekers in limbo.
At the Beijing train station on Monday, a young man named Dong Shiwei who graduated last spring from a business college in Dalian waited in line to buy a ticket home for the holiday. Unable to find a white-collar job here, Mr. Dong has had to work at a fast-food restaurant for $220 a month, less than the average monthly income.
“Finding a job at the moment is really hard,” he said. “I’m not very hopeful. The wages are really low, much lower than I expected.”
The plight of college graduates is expected to get worse because Chinese universities are increasing their enrollments each year. Furthermore, the ranks of overseas Chinese who are returning to look for work are swelling because of the recession in the United States and Europe.
Of 5.59 million college graduates in 2008, an estimated 27 percent were unable to find jobs by the end of the year, according to the Chinese Academy of Social Sciences.
Though Chinese leaders are nervous about the mounting unemployment problems, some parts of the government are benefiting. The People’s Liberation Army, a force of 2.3 million, has had increasing success in recruiting college students through the promise of large cash stipends. And last November, nearly one million students took the civil service exam to compete for government jobs, a jump of 25 percent over the previous year.
For the students, that meant the odds were dismal: every job opening in the government had an average of 78 applicants.