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Amid China boom, job search for many grads goes bust

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By Michael Martina

BEIJING (Reuters) - Yan Minglong, one of millions of recent Chinese college graduates, is not impressed with the doors opened by higher education.

"Jobs? What jobs?" the 23-year-old said, whiling away his Saturday afternoon in a billiards hall in Shigezhuang, a gritty neighborhood on Beijing's northern outskirts where cheap rent is the main draw for some of China's white-collar hopefuls.

Students from the country's largest-ever college graduating class, 6.6 million, have gone from hitting the books to hitting the streets in search of work this summer.

But pouring that many graduates into an economy long known as the world's workshop has fueled worries about the market's capacity to absorb them and the potential for political unrest.

In a country where 80 percent of the population has not finished secondary school, according to the Economist Intelligence Unit, Yan is arguably among China's highly educated.

A graduate from a three-year automotive program at Hebei province's Jiaotong Vocational and Technical College, Yan has been working as a car repairman. He lives in a dormitory on the west side of Beijing with six others and pulls in about 2,500 yuan ($390) a month.

"How can I say I'm satisfied? Even after five years, I know my income will be basically the same as my friends who didn't study after high school," said Yan.

A 2011 study by the state-run Chinese Academy of Social Sciences paints a rosy picture of graduate employment, saying only 6.7 percent of 2010 graduates with four-year or vocational degrees were still looking for work six months after leaving campus.

The vast majority had found jobs or were pursuing further studies. Unemployment was down almost three percent from 2009.

Wang Meiyan, an associate professor at the Institute of Population and Labour Economics at CASS, said that, on the whole, China's job market for recent graduates was healthy.

"Their employment challenges aren't as serious as society thinks. Any difficulties that graduates are facing in China's job market doesn't mean that the problem is unique to China," she said.

By comparison, a study by the Washington, D.C.-based Economic Policy Institute put the unemployment rate for recent U.S. graduates between April 2010 and March 2011 at 9.7 percent.

But Ren Xinghui, a researcher at the Transition Institute, an independent Beijing think tank, was skeptical of the government-approved graduate employment statistics.

"Job rates are measured by schools' administration departments and are an important index of university performance that will determine their treatment, giving them an incentive to over-report employment rates of their graduates," he said.

Whether the market can absorb another six million-plus college graduates this year depended largely upon how job opportunity was defined, he said.

"If it just means having work, that is certainly available. But if we are talking about the opportunity in the sense of it matching training and room for professional development, then there is a problem," Ren said.

CAN'T GET NO SATISFACTION

Even if graduate employment rates are as high as the government says, the jobs on offer are often far from what ambitious twenty-somethings want.

That's a universal predicament. But in China, where heady growth has nourished equally heady hopes, the gap between aspirations and grinding reality hurts all the more.

"Finding a job is not a problem, at least not in a city like Beijing," said film animation major Feng Biao, sitting on the bed in his cramped Shigezhuang apartment. "The problem for most people is finding a job that suits you, that you actually like."

He has stacked apples and bananas on a table under a small hanging shaving mirror. Aside from that, the walls are bare.

It is a one-and-a-half hour one-way subway commute to his office in central Beijing, where he earns about 3,000 yuan ($470) a month designing pop-up Internet advertisements.

Once accessible only to the social elite, China's higher education system has absorbed millions of students since 1977 when universities enrolled only 220,000 students following the turmoil of the Cultural Revolution.

Many of the parents of today's graduates came of age during the Cultural Revolution (1966-76), when Mao Zedong launched a tumultuous campaign to attack bastions of privilege -- including education -- and the number of students allowed into university was drastically curtailed. Throughout that era, the state allocated jobs to urban workers.

Today's education expansion has spawned a new crisis of confidence in the value of higher learning, with starting salaries for graduates often not much higher than those of migrant workers in factories.

Even if they are in a position to receive a full-time wage, they often do not get health insurance or other social benefits.

For the government, the prospect of widespread under-employment is a political worry, as well as an economic one.

China's modern history is punctuated with student-led protests and the government has been alert to the possibility of student unrest ever since anti-government demonstrations crushed by the military in and around Beijing's Tiananmen Square in 1989.

"China's employment market is absolutely not healthy. There is a limited demand for white-collar workers that makes it difficult for graduates to find work. One reason for that is the large-scale expansion of universities," said Ren, the researcher.

Nationwide, university graduates of four-year and vocational programs had average monthly salaries of just under 2,500 yuan a month in 2010 including benefits, according to the CASS study.

Feng pays out 20 percent of his salary for his one-bedroom apartment, the floor dotted with cigarette butts. After food, transport, and the occasional treat, he says he saves nothing.

"I guess having just graduated I should have expected to be broke," Feng said.

TOUGH CHOICES

Not all graduates' circumstances are as strained as Feng's. Those with the connections to secure jobs at big firms or in government can do relatively well.

Lei Siyu, who graduated from the Dalian University of Technology in the spring with a degree in software engineering, beat the gauntlet.

The skinny Sichuan native said he was frustrated when his first round of graduate school applications were all rejected and he wasn't hired for a job at China's Internet giant, Baidu.

But he now has a job offer on the table from a company, which he says will pay about 7,500 yuan a month. It is a golden ticket by most measures -- one that would put him squarely within the top four percent of recent graduate wage earners. Still he is not sanguine about the process.

"Getting that internship is easy, but turning it into a job is hard. It felt like most of the people I was competing with had PhDs," he said.

Even China's top students have to make tough choices given broader social dynamics in China, broad enough that foreign firms aren't the magnets they used to be.

Government agencies and state-owned enterprises accounted for nearly a third (32 percent) of jobs for Chinese graduates in 2010. Among four-year degree graduates, that number is 41 percent, the CASS study said.

Jin, an international relations graduate from the elite Tsinghua University who asked that only her surname be used, turned down higher-salary prospects at a foreign company for a spot at a state-owned enterprise in the transportation sector.

"The salary definitely won't be as high as at a foreign company. It's not my ideal job, but from a long-term perspective taking this job was a good choice," Jin said.

The highlight of that offer: promise of a Beijing resident permit, called a "hukou" in Chinese. With hukou quotas set for government agencies and state-owned companies, landing that kind of job can mean opening the door to social privileges.

"If you're living in Beijing without a hukou, it is hard to buy a house and impossible to get a car," she said. "If I plan to stay in Beijing, the next two years at this job would remove a lot of obstacles for me."

(Additional reporting by Beijing newsroom; Editing by Nick Macfie)