Youth Unemployment Rate in China Increases With a Record Number of College Graduates

China is paradoxically entangled with an increasing youth unemployment rate and a shortage of workers, all the while producing the highest number of college graduates in its history.

China has gone through numerous educational policy developments, especially since Deng Xiaoping opened the country’s economic door to foreign businesses in 1978. At the core, the policies have been deeply impacted by the country’s pursuit of rapid economic growth, and more recently, of a global foothold in science and technology. Accordingly, the government has pushed for having a higher percentage of its labor force educated beyond compulsory education. As a result, the college enrollment rate for 18-year-olds in China reached a record high of 57.8 percent, up from 40 percent six years ago.

However, its emphasis on education came with a repercussion; the unemployment rate of college graduates is increasing. Although it rose only 0.2 percent from the previous year from 18.2 percent to 18.4 percent, the trend is concerning as the national urban unemployment rate fell from 6.1 percent to 5.9 percent within the same period. Considering that the Bank of America has allegedly estimated the youth unemployment rate in China to reach 23 percent by July this year, the problem cannot be overlooked.

The workplace disruption caused by Covid-19 could have well been an explanation for the youth unemployment rate during the highs of the pandemic. Yet, as the jobless rate among 16- to 24-year-olds is showing the opposite trend as that of the national, the pandemic would likely not provide a convenient explanation for the worrisome trend anymore.

Shunli Ren, a Bloomberg Opinion columnist, claims that the youth unemployment rate may be explained by how students think of jobs as a result of the government’s long emphasis on education, reinforcing the centuries-old cultural perception of scholarship. She gives an old proverb, “of all trades, scholarship rules supreme,” as a part of the explanation. The saying roughly implies that professions not requiring much educational background are not highly regarded in Chinese society. In short, Ren believes that college graduates in China are only looking for highly esteemed jobs, ignoring numerous job openings in the manufacturing industry.

The shortage of workers in the manufacturing industry has, indeed, been a problem in China for a long time. National Public Radio’s (NPR) interview with Yen Xiyun, a recruiter for electronics factories in southern China, provides a first-hand view of the problem. Xiyun’s comment on what she hopes for her 12-year-old son’s future also exemplifies Ren’s argument regarding the widespread cultural perception in China. One of the interviewers reported, “she hopes he’ll be successful — a dragon, as she says — but outside of the factory.”

The Ministry of Education of the People’s Republic of China has been successful in pushing for more higher-educated in the labor force. However, its policies for the past few decades now present a nationwide problem — an increasing number of college graduates and an increasing youth unemployment rate. Photo: Ministry of Education of the People’s Republic of China

However, Ren does not solely blame the younger generation’s cultural perception for the increasing jobless rate among young adults or for the worker shortage at factories. Rather, she takes a hard stance against the government’s educational policies, especially criticizing the early sorting of students only after nine years of compulsory education.

In China, those who wish to proceed with their education after middle school need to take a test (zhongkao), and based on the result, their options for further education can be limited. Students with a passing score can apply to high schools, while those who do not have to either discontinue their studies or proceed to secondary vocational school. As of 2020, over 1.8 times more students entered regular senior secondary schools (high schools) than the number of students who proceeded to secondary vocational schools.

Chinese students’ academic projectile had been confined based on their secondary education; students from secondary vocational schools mostly have to join the workforce and high school students went on to college after taking the infamous entrance exam (gaokao). Even junior colleges — post-secondary vocational training institutions — were mainly reserved for high school graduates who did not score high enough to enter regular college.

Yet, as recently as June last year, China’s Ministry of Education (MOE) announced that it will “reduce the barrier for zhongzhuan [secondary vocational schools] students to enter higher education” by implementing a “vocational education gaokao.

The number of college graduates in China has steadily increased over the last decade. This year, it set a record number of college graduates of 10.8 million, while the country enters the worst job market in decades. Source: Ministry of Education of the People’s Republic of China Graph: Caixin

Although the government’s measure may alleviate the seemingly everlasting educational immobility, especially for the rural poor, it will most likely add more to the already ongoing problem of youth unemployment. All the while the country enters the worst job market in decades, Chinese higher education institutions are producing a record number of college graduates of 10.8 million, exacerbating the mismatch between the job market’s demand and supply.

To overview, China is paradoxically experiencing a concerning increase in youth unemployment and a shortage of workers especially in the manufacturing industry, at the same time. It seems that the centuries-old perceptions — factory works are “low-end and low-quality” and education is the key to success — stand in the way of solving the labor force mismatch and consequent increase in unemployment.

In part, the perceptions seem to be a byproduct of the government’s policies to promote education among its working population for the past few decades. Moreover, its attempt to increase educational mobility, though it is a praiseworthy goal in itself, may be working against achieving the goal of changing the perceptions.

Chu Zhaohui, a researcher at the Chinese Academy of Educational Sciences, provides theoretical, and yet fundamental advice, “One of the important pursuits of the modern vocational education system is to cultivate talent suitable for model social development, and that requires the establishment of a social value system that respects the equality of all people.”


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