One of a record high 8.7 million graduates who entered China’s job market this summer, the next stage of Rita Zhang’s life has started badly.
The 23-year-old, who studied cultural industry management at a university in Beijing, was looking forward to joining an advertising start-up until the outbreak of coronavirus led to nationwide lockdown in late January.
The job offer was withdrawn with her prospective employer battling high office rent and diminishing revenues, stranding Zhang in southwestern province of Yunnan, unable to seek alternative opportunities.
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After failing to enrol on a local teacher programme, Zhang eventually accepted a role as a new media assistant at a local training company, with a monthly salary of just 2,000 yuan (US$286), although this lasted for just two months.
All my career plans have been disrupted
“All my career plans have been disrupted,” she said. “I’m now preparing for the postgraduate exam next year. I hope that everything will return to normal when I’m back [in Beijing].”
While no official employment data on new graduates available, some research has estimated that only a quarter had received a job offer by the end of May.
Add this to the questionable status of many of China’s 290 million migrant workers, many of which have lost their jobs due to the coronavirus, the outlook is bleak. A report by Renmin University at the end of June also suggested 80 million service sector employees and 20 million manufacturing jobs had also been affected by the outbreak.
Some 30 million small and medium-sized enterprises and 70 million self-employed workers are also under pressure, the report said.
A recent survey of around 2,500 small and medium-sized firms by Peking University’s National School of Development also found 71 per cent of respondents were worried about upcoming orders, meaning they were adopting a “cautious” approach to recruitment.
This presents a different picture to the official surveyed urban unemployment rate which peaked at 6.2 per cent in February but moderated to 5.9 per cent, or 27 million unemployed, in May.
China is set to release its June unemployment figure on Thursday, along with the headline gross domestic product growth rate, with expectations it will remain around the annual target of around 6.0 per cent. In 2019, China created 13.52 million new urban jobs having set a surveyed urban unemployment rate target of 5.5 per cent for last year.
The job market has, though, steadied as the country slowly resumed economic activity after the nationwide lockdowns, with only 1.2 per cent of people having not resumed work in May from a high of 18 per cent in March, according to a study by Zeng Xiangquan, the head of the China Institute of Employment Research at Renmin University.
However, he warned that the prosperity index for China’s job market, which is based on a mix of research including online postings and questionnaires, has fallen for 10 consecutive quarters since the end of 2017.
“Macroeconomic issues remain the overriding factor affecting China’s job market. Without the pandemic, the job market remains pressured by the economic slowdown,” said Zeng. “In such a special period, [the government] should appraise investment projects with their job creation function.”
China’s policymakers have already prioritised employment for this year, budgeting most of its 3.75 trillion yuan (US$536 billion) in additional spending in the annual budget to the protection of market entities, while also vowing to create 9 million new urban jobs this year.
To achieve the goal, China’s State Council has encouraged a street vendor economy as well flexible work including blogging, live streaming sales and gaming.
“The employment situation is extremely severe, with college graduates being the most pressing group. We must fully implement job priority policies and remove any barriers,” Premier Li Keqiang said at the State Council executive meeting last week.
Yu Yongding, a senior economist at the Chinese Academy of Social Sciences, believes a GDP growth rate of 2.4 per cent is needed in 2020 to deal with the unemployment situation.
China’s economy shrank by 6.8 per cent in the first quarter of 2020, although it is expected to have returned to growth in the second quarter when the figure is announced on Thursday after recent improvements in the official manufacturing purchasing manager’s index, new loans and exports.
Without economic growth, government endeavours to stabilise employment will lead to either greater relief measures or lower productivity
China is expected to be the first economy to announce positive growth after the coronavirus outbreak, with the likes of the United States, Japan and European nations still struggling with the impact of Covid-19.
“Without economic growth, government endeavours to stabilise employment will lead to either greater relief measures or lower productivity. It could mean the rise of implicit unemployment or the decline of average revenue,” said Yu. “Development is the key to solving China’s problems, including jobs.”
Standard Chartered predicts China’s second quarter growth could reach 3 per cent, with Hua Changchun, chief economist of Guotai Jun’an Securities, predicting an increase of 3.4 per cent.
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This article China’s unemployment crisis shows no signs of easing as graduates face reality check due to coronavirus first appeared on South China Morning Post