BEIJING (REUTERS) – Ms Jenny Bai was among 10 high-performing computer science students from different Chinese universities selected by a Beijing-based internet firm for a job upon graduation, following four rounds of arduous interviews.
But last month, the company told the students their contract offers were cancelled due to Covid-19 headwinds and the bad state of the economy in general – obstacles facing a record 10.8 million Chinese university graduates this summer.
“I’m worried,” said Ms Bai, who graduated this month and did not want to name the firm to stay on good terms. “If I can’t find a job, I’m not sure what I’ll do.”
China’s Covid-19 restrictions have battered an economy already slowing due to a property market downturn, geopolitical worries and regulatory crackdowns on tech, education and other sectors.
A cohort of graduates larger than the entire population of Portugal is about to enter one of China’s worst job markets in decades at a time when youth unemployment is already more than three times China’s overall joblessness rate, at a record 18.4 per cent.
There is no script for how such high youth unemployment will affect Chinese society.
Struggling to find jobs goes against what educated young people have come to expect after decades of breakneck growth, and is awkward for China’s stability-obsessed Communist Party, especially in a year when President Xi Jinping is expected to secure a precedent-breaking third leadership term.
“The social contract between the government and the people was: You stay out of politics, and we will guarantee that every year you’ll do better than last year,” said Ms Michael Pettis, a professor of finance at Peking University. “So the concern is that once that guarantee breaks apart, what else has to change?”
Premier Li Keqiang has said stabilising the job market for graduates is a top government priority.
Companies granting internship posts to new graduates will receive subsidies, on top of other perks aimed at boosting employment in general. Some regional governments have offered cheap loans to graduates looking to launch their own businesses.
State-backed firms are expected to pick up some of the slack in private sector entry-level jobs.
Mr Rockee Zhang, managing director for Greater China at recruitment firm Randstad, said China’s entry-level jobs market was worse even than during the 2008-09 global financial crisis, estimating new jobs falling 20 to 30 per cent from last year.
“This year is a low point, the lowest I’ve seen,” he said.
Expected salaries are also 6.2 per cent lower, according to Zhilian Zhaopin, another recruitment firm.