China’s job market is set to face a renewed challenge next year, with a record number of college students about to graduate, prompting analysts to urge Beijing to increase efforts in restoring confidence in the private sector.
The number of college graduates is expected to reach 11.79 million next year, the Ministry of Education said on Tuesday, up by 210,000 from this year.
Beijing has been under pressure to create enough jobs amid an uneven post-Covid recovery, which has been dragged down by the protracted slump in the property market and a weak private sector.
China’s college graduates exceeded 10 million for the first time in 2022.
The jobless rate for the 16 to 24 age group has remained at an elevated level, hitting a record high of 21.3% in June before Beijing suspended the release of the data, citing the need to further improve and optimise the survey.
“Companies will inevitably scale back their hiring needs, to reduce employment costs under the current economic uncertainties, especially the young inexperienced college graduates,” said Mao Yufei, an associate researcher with the China Institute for Employment Research.
And at a time when the services sector is facing various headwinds, and while factories are short of labour, young people generally prefer white-collar jobs over blue-collar, with this structural imbalance exacerbating the employment problems, Mao added.
Colleges should, according to Mao, fully utilise the internet to provide graduates with updated job information and build more platforms to provide career planning courses.
Apart from bolstering advanced and hi-tech sectors, Beijing should also increase efforts to revitalise the private sector to release the potential of new jobs, Haibin Zhu, chief China economist and head of Greater China economic research at JPMorgan, said.
“Actually the most important, or number one policy action is to restore the confidence among the small and medium-sized enterprises sector. It is not necessary about fiscal support, but more about the transparent and predictable policy environment,” said Zhu.
“We have seen a lot of the policy swings in recent years, so we need a more predictable, stable policy environment, and also we need them to remove these policy distortions,” he said.
China’s education ministry has introduced 26 measures to boost the employment and entrepreneurship for college graduates in 2024, asking local governments to make early examination arrangements for public sector work and explore suitable job possibilities in underdeveloped regions.
It also encouraged college graduates to utilise the emerging market needs from internet platforms to seek entrepreneurship or flexible employment.
The ministry also asked universities to employ staff specialising in employment counselling, while also requiring university staff to conduct more visits to companies to assess the needs of the job market.
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