Universities in Guangdong are farming out jobless graduates to employment agencies to improve their graduate employment figures.
Students listed with employment agencies can be counted by universities as being employed.
'My counsellor advised me to move my file to the Nanfang Talent Market so that I can stay in Guangzhou,' said Effie Zheng, a Chaozhou native who has graduated from Guangdong University of Foreign Studies (Guangwai).
Mr Zheng said he and several classmates, as well as friends from Guangdong University of Law and Business, paid the agency 1,500 yuan to keep their files for three years and were allowed to retain their Guangzhou hukou, or residency.
What they did not know was that the education department had asked universities to keep unemployed graduates on file for free for two years to ease social pressure when graduate unemployment became a problem in 2003.
'It wasn't clear that I could keep my file at Guangwai. Our school promoted the talent market but afterwards I realised that they did it so that they did not have to include us in unemployment figures,' Mr Zheng said.
A Guangwai counsellor referred queries about the practice to higher authorities at the university, saying 83 per cent of the 2,224 students who graduated this year had found jobs by July 1.
A counsellor at Guangdong University of Law and Business reported an employment rate of 96.06 per cent for last year's graduates. He said he was aware some graduates were maintaining their files at employment agencies.
'They do it for the hukou. I am aware of the practice but I've not received any complaints from students,' he said.
The education department requires universities to guarantee students an employment rate of 70 per cent.
In Guangdong last year, 97.3 per cent of graduates found jobs. But teachers complain that instead of focusing on teaching they have to think about finding jobs for their students while the students spend their entire last semester job hunting.