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China: Unemployment spectre fears

EducationWorld June 2020 | International News

“Graduation equals unemployment has long been a common saying in China (the nouns share a character). It is often used in jest by university students as final exams loom. But for the 9 million or so who graduated in May — a record high — the words convey a dark reality. As China limps back to work after Covid-19, their job prospects are truly bleak. They will enter the workforce even as prospective employers are mulling lay-offs and hiring freezes. For a middle class used to relentlessly strong economic growth, the shock will be great.

As it surveys an economy ravaged by the disease, the Chinese leadership’s biggest worry is unemployment. In February the urban jobless rate jumped to 6.2 percent, the highest ever. In March it fell slightly to 5.9 percent as businesses reopened. But official figures mask the scale of the problem. Urban unemployment could reach 10 percent this year, reckons the Economist Intelligence Unit, an affiliate of The Economist. And that does not include the tens of millions of migrants who sat out the epidemic in their ancestral villages. Many of them now have no jobs to return to in the cities.

China’s leaders describe the problem of graduate unemployment as a matter of “paramount importance”. In recent days, university officials around the country have been holding meetings to discuss how to ensure that as many as possible find jobs. They often use similar language, stressing the “urgency” of this “political task” relating to “social stability”. Jobless migrants make officials anxious, too. But the party frets more about threats involving better-educated people with urban roots and strong social networks.

Last year just over half of entrants into China’s urban workforce were university graduates. Usually about 60 percent of them are hired by small and medium-sized enterprises. But such firms are among the hardest-hit by the coronavirus. On April 14, Prime Minister Li Keqiang told his cabinet that the situation for this year’s graduates is “grim”.

Students didn’t have to search for jobs until the 1990s. Instead, they had to take positions assigned to them by the government. As a result of Covid-19, once again, officials are getting more involved in finding work for students than they have been since those days. Xinchao Media, an advertising company, says the government of Chengdu, the south-western city where the firm is headquartered, has offered to recommend graduates for its job openings. The city of Beijing, among others, has launched a recruitment website for people preparing to graduate.

The government is right to worry about social stability. Well-educated young people have been in the vanguard of many of China’s biggest protest movements of the past century. Students whose futures are clouded by the unaffordable housing and competition for jobs with immigrants from the Chinese mainland, were at the forefront of last year’s unrest in Hong Kong.

As the Covid crisis subsides in China, social tensions are becoming more evident. Hundreds of shop owners recently took to the streets of the southern city of Guangzhou and dozens gathered outside a mall in Wuhan, the capital of Hubei, to demand rent deductions after weeks of unemployment. videos of the protests were swiftly removed from the Internet.

(Excerpted and adapted from The Economist and Times Higher Education)

Also read: China: COVID-19 lockdown

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