Cover Story: China’s Record Class of College Graduates Faces Final Test in Shrinking Job Market

China’s 2024 class of college graduates, numbering 11.8 million, faces an exceptionally weak job market due to payroll reductions in former growth sectors like internet companies, education employers, and real estate developers [para. 1]. This economic shift has driven the unemployment rate for 16- to 24-year-olds in urban areas to 18.8% in August, the highest rate reported this year [para. 2]. Companies focusing on cost-cutting and efficiency now practice more rigorous hiring processes, leading to an increasingly competitive job environment [para. 3].

New graduates often prioritize job stability and work-life balance over quick employment, a trend that has contributed to "slow employment" as they take their time finding jobs that align with their values [para. 4]. Many fresh graduates are overqualified for lower-skilled jobs but lack the experience for higher-skilled positions, exacerbating employment difficulties. Experts predict these employment challenges will persist due to continuous college enrollment expansion [para. 5]. Government initiatives like temporary public sector jobs offer short-term relief but fail to address the fundamental issues, suggesting a need for structural reforms [para. 6].

Personal stories from recent graduates highlight the bleak job market. Xu Yu, despite a strong academic background and internships, spent months job hunting with no success and received rejections from major companies like Tencent and JD.com [para. 8]. Tang Hui faced a similar situation, with a job offer being retracted, leaving her to apply to over 50 companies without a single offer [para. 9]. Companies like Tencent and JD.com have drastically reduced their recruitment, reflecting a broader trend of reduced hiring and increased layoffs [para. 10][para. 12].

The gap between overall labor market recovery and severe youth unemployment is stark. While the national urban unemployment rate was 5.1% in the first seven months of 2024, the youth unemployment rate was 14.9% [para. 19]. Less than 30% of employers are hiring as many new graduates as last year, presenting a challenge for recent graduates competing for fewer positions [para. 20]. The job market also suffers from a mismatch between supply and demand, with many graduates eyeing state-owned enterprises while private enterprises struggle to attract applicants [para. 21][para. 22].

Internet giants like Alibaba, Tencent, and Baidu, once major recruiters, have significantly downsized their workforce, further shrinking job opportunities [para. 23]. Similarly, the education sector has suffered due to regulatory policies, fundamentally altering the job landscape [para. 25].

Emerging industries such as new energy and semiconductors offer potential employment but are highly selective, requiring specialized skills and often advanced degrees [para. 28]. Consequently, there is less demand for even traditionally well-paid fields like semiconductors now, reflecting an overall cooling in these sectors [para. 29].

Young job seekers are exploring options influenced by social media-driven expectations, often leading to unrealistic salary demands. This has resulted in some companies ceasing to hire new graduates altogether due to these inflated expectations [para. 31][para. 32]. The desire for job stability drives many graduates towards government and state-owned enterprise positions, with fierce competition for these coveted roles [para. 36].

The Chinese government has taken multiple steps to mitigate unemployment among young job seekers, including subsidies, expanded hiring at state-owned enterprises, and the creation of policy positions [para. 41]. However, concerns linger regarding the quality and sustainability of these jobs, with some fearing an over-reliance on such positions could exacerbate inequality and dampen innovation [para. 42][para. 43].

Experts argue that broader economic issues, especially those affecting private SMEs, are a fundamental cause of youth employment struggles. They call for tax cuts and incentives to boost SME confidence and demand, essential for job creation and securing the future of young graduates [para. 49][para. 50].