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China’s new graduates hit by falling wages

Job seekers line up at a job fair at Tianjin University © Reuters

YESTERDAY by: Tom Hancock in Shanghai
Chinese graduates’ salaries have fallen for the second year in a row, according to a large-scale survey, as a glut of degree-holders grows thanks to a massive expansion of higher education.

A record 8m Chinese graduates are due to join the labour force this year, just under half of all workforce entrants and up from about 4m just a decade ago. China has opened hundreds of new universities over the period, while a growing number of parents expect their children to attend university.

But as China’s economy has slowed, average monthly salaries for new graduates fell 16 per cent to Rmb4,014 ($590) this year, the second consecutive year of declines, according to a survey by recruitment website Zhaopin.com.

“With such a large graduating class this year, new jobseekers still face a daunting challenge, especially those from less well-known universities outside the top tier,” the survey said.

Xiaoyu Zhang, who will graduate in accounting this year from the Southwestern University of Finance and Economics in Chengdu, said she had submitted 17 applications before securing an accountancy job at a state-owned technology company — with a monthly salary of Rmb4,500.


“I feel unsatisfied with my salary,” she said, adding that she had been attracted by added benefits such as a subsidised accommodation, common in Chinese state-owned companies. “I don't enjoy accounting but I am not competitive in any other area.”

The prospect of a large cohort of university-educated yet unemployed young people worries China’s Communist party, which fears the potential for social unrest. In what has become an annual mantra, China’s Premier Li Keqiang called last month for “more efforts” in helping graduates find jobs or start businesses.

The government says 3.34m jobs were created in the first quarter of this year, and the Zhaopin data, culled from about 93,000 students who will graduate this year, suggest the quantity of jobs for graduates is less of a problem than their quality.


Although a growing number of students say securing employment is difficult, more than 70 per cent of students set to graduate this year have already received at least one job offer, according to the survey.

Concerns over the low quality of graduate jobs have been highlighted in recent years by the expanding ranks of students enrolled in “internship” schemes in the manufacturing and service sectors, often involving low-paid and menial work such as assembling phones or moving boxes in e-commerce warehouses.

The gap between graduates’ expected and actual wages is widening, the survey said, with more than three-quarters of those surveyed paid less than their expectations. Female graduates are worst off: they are paid Rmb750 less than men per month on average, according to the survey.