China's surge of college graduates finds white-collar work elusive

As if college seniors hadn't watched their job prospects sink low enough.

Students from Guangdong Province, China's wealthiest region, are so desperate for work they're applying for jobs as nannies – and getting rejected, a local paper reported last month.

It's probably not what young people had in mind as they slogged through years of tough exams, buoyed by the new emphasis on higher education and the prospect of white-collar employment in a booming China.

Some 6.1 million grads are expected to flood the job market this year – joining the 27 percent of last year's diploma-holders who still haven't found work. Instead, they're finding deserted job fairs, hiring freezes, and salaries that migrant workers might expect. Confronted by global recession and a heavily blue-collar economy, China's educated elite are having to lower their expectations – frustrating families and putting the government on alert ahead of the 20th anniversary of the student-led Tiananmen protests.

There's "a mismatch between expectations and realities, exacerbated by the current economic slowdown," says Thomas Rawski, a China expert at the University of Pittsburgh in Pennsylvania. "It really is a clash of preferences."

The oversupply of students first ballooned in 1999, when China erected a flurry of colleges in an effort to mint more of the scientists and managers it needed for a 21st-century economy. It also sought to absorb a burst of teenagers born in a post-Cultural Revolution baby boom after 1976.

Enrollment rose quickly, from 3 percent of college-age students in the 1980s to 20 percent today.

Despite the rapid expansion, only 6 percent of the population now holds college degrees. Not surprisingly, graduates expect elite jobs, as do the relatives who footed their tuition bill.

Topping the A-list are government jobs, which pay modestly but offer benefits and security. Last year, some 750,000 students took the civil service exam – and only 2 percent could expect slots. Big companies draw students, too: Though less stable than the civil service, business jobs pay well and provide better training.

And location is everything. Youths from across the country are flocking to east coast metropolises like Beijing and Shanghai.

But even these megacities can't furnish enough of the gleaming office jobs that graduates want.

China's export-dependent economy deals mainly in manufacturing and processing, which require unskilled workers. The white-collar end of the production process – design and sales – mostly happens overseas, says Lai Desheng, director of the Center for Labor Market Research at Beijing Normal University.

And the skilled-labor positions in between, with their 14-hour days on factory floors, fail to tempt many college grads, he adds.

Don't put me on assembly

Don't ask Meng Xiao to assemble laptops. The 2008 grad from Hebei Province hopes to design software one day. But like others in this tight job market, he's lowering his sights.

"Let me first find a job, then talk preferences," he said mildly at a depressing job fair last month. Young hopefuls milled about empty recruiting booths in a fluorescent-lit lobby. Only a few firms registered for the fair had showed up.

Hiring freezes are spreading: Some 65 percent of businesses in the Pearl River Delta, an economic hot spot, don't plan to recruit graduates this year, a survey by the Kingfield Management headhunting service found last month.

The government hopes to keep urban employment to 4.6 percent this year – the highest rate since 1980, according to official figures.

Even "Ivy Leaguers" are throwing demands overboard. Before the crisis, 5,000 yuan ($735) a month would have been "acceptable" in pricey Beijing, says one senior from Peking University, China's top school. But her roommates have settled for jobs paying monthly salaries of 3,000 yuan and 1,700 yuan ($440 and $250).

By comparison, a migrant worker in Shenzhen, the costliest of factory cities, earned about 1,500 yuan ($220) a month with overtime before the downturn.

For weeks, the government has been trying to lower students' expectations. State media frequently report how bad the job market is and how hard leaders are working to improve it.

Measures announced Jan. 7 sought to spruce up second-tier paths. One offered subsidies and loan forgiveness to graduates who work for a few years in China's less-developed western provinces.

Those carrots have been dangled for years, but most grads aren't biting, says Professor Rawski. It's like asking New Yorkers to move to West Virginia.

"It's too hard" to live out west, says the Peking University senior, laughing at the idea that any of her friends would consider it.

Start my own firm? Maybe not.

The Jan. 7 policies also encourage youths to start businesses – an even tougher sell.

Chinese students are rewarded all their lives for high scores on established exams, not for risk-taking or creativity, so most graduate with little stomach for entrepreneurship. And China's business jungle – dominated by state-backed oligopolies and other corporate giants, and layers of regulation and corruption – is no place for novices.

Despite the bottleneck from college to cubicle, the authorities have not choked off college expansion. They have reined it in, though, to 5 percent annual growth, down from 30 percent a decade ago.

"Talent is the wealth of the country," says Professor Lai. "If China wants to develop, it must raise its education level."

The freedom that today's youths enjoy in choosing their careers is also "a measure of progress in society, despite unemployment," he continues.

The previous generation worked in jobs picked by the state. Textbooks warned that, under capitalism, "graduation means unemployment."

Some youths today seem to embrace the added risk and reward.

Zhang Yueling – whose parents earn a living making mining tools from home – hopes one day to design computer chips. The 2008 grad quit her job in central China last month and moved to Beijing to find a company that would help her achieve that dream.

Her previous job paid 3,000 yuan a month ($440), but she's willing to work for 2,000 yuan ($295).

She's all alone in the big city, wandering an abandoned job fair on a freezing weekday morning.

But she's not discouraged: "I don't expect to find a job soon, but I'll keep looking till I do."