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DOING BUSINESS IN CHINA

Interns, Employers Find Double Happiness in Evolving Labor Market

It’s nearly summertime here in China, but the living isn’t necessarily so easy for the legions of students who will be heading to companies over the next month to start summer holiday internships. Such internships in China have a brief but colorful history over the last two decades, not all of it flattering. In many ways the internships of contemporary China look something like apprenticeships of yesteryear in the West, where young people eager to obtain job skills can get valuable training — but not much else — from a system that uses them as a convenient form of cheap labor.

That said, my polling on the topic of interns this week made me realize just how much this resource is underutilized by foreigners in China, especially the young startups that could most use such labor and have lots to offer in exchange. At the end of the day, the intern scene in China is very much one of mutual exploitation, with companies providing little or no pay and sometimes long hours to young students eager for a chance to learn some valuable skills and obtain future jobs.

As someone who has worked on both sides of the intern aisle, I do feel like I have some relatively unique insight as to how the current landscape has evolved here in China. While teaching at a top journalism program in Shanghai, I got to see firsthand how obsessed today’s Chinese students are with finding jobs after graduation, and how they see interning as a key part of that equation. At the same time, many companies in China rely heavily on interns to do very real work, in contrast with the West where such interns are viewed as largely unskilled, temporary workers that are nice to have, but easy to do without.

The topic of interns as important contributors to China’s economy became a hot topic around 2010 and 2011, when some exposes uncovered how critical such workers were at factories in the Pearl River Delta manufacturing hub near Hong Kong. At that time, labor groups showed how many of the area’s manufacturers, from small shops all the way up to iPhone manufacturer Foxconn, kept costs down partly by relying on underpaid long-term interns as an important part of their workforce.

Following a public outcry, China overhauled its intern system and put limits on how long people could work under intern status, leading to what we see today. But the fact of the matter is that interns are still paid very little, some might argue justifiably, since they have relatively little to offer in terms of experience and are gaining valuable skills during their apprenticeships.

At the same time, vocational schools and universities are also quite complicit in the interning game, requiring their students to intern at least one semester during undergraduate years and often up to a year or more during graduate programs. That’s quite different from the U.S., where such interning is usually voluntary and generally done over holiday periods, most notably summer break.

Paltry pay

My polling of several organizations revealed that most companies, including foreign ones, aren’t very generous in what they pay to interns. The highest rate I could find was 120 yuan ($18.93) per day, or roughly $2.40 per hour if we assume an eight-hour day. More common was an 80 yuan-per-day fee, which is what Caixin pays and is the standard rate from another major multinational I polled. In exchange for such fees, there’s an unspoken compact that companies will at least consider such interns for full-time employment after graduation.

Here I do feel a need to inject a bit of my own experience from my teaching days, which sheds some light on one of the key elements that greases the intern system we see in today’s China. During my six years of teaching, I was quite surprised to discover the huge obsession that Chinese students have with finding employment after they graduate. The impulse is so ingrained into the system that students aren’t expected to take many classes during their final year of college or graduate school, with the expectation they will spend most of their time job hunting instead.

Of course Western students are also concerned about finding jobs for after graduation, though the sense of urgency is far less than it seems here in China. I have my own theories about why the job-hunting urgency is so strong here. One of the most important factors lies in the youth of China’s market economy, which has created an uneven job landscape with very different expectations and requirements from the young private and older state-run sectors. The other big factor, in my view, is the former one-child policy, which puts huge pressure on today’s only-offspring to not only become the next Albert Einstein or Steve Jobs, but to do so by the age of 30.

All that said, the China interning system of today does seem to have evolved into a very useful tool for all parties involved, providing companies with a chance to sample the future talent they will need while satisfying the job-hunting need of imminent graduates. The major companies I polled, both foreign and Chinese, seemed pretty well plugged into the system and probably don’t need any advice from me on how to find their own interns.

But these eager young apprentices can also be a valuable resource for smaller foreign entrepreneurs, and I would strongly recommend that these smaller companies seek out such students. They can do so through a number of channels that are relatively easy to tap, including reaching out to local universities and posting opportunities on mainstream recruitment sites like zhaopin.com, 51job.com and interning specialists like shixiseng.com.

Doug Young has lived in Greater China for two decades, including a 10-year stint at Reuters, where he led China corporate news coverage. Send your questions or comments to DougYoung@caixin.com

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