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China’s labour market has undergone big changes this year as a result of regulatory tightening and a pandemic-induced economic slump. Illustration: SCMP

China’s jobseekers search for ‘stability’ as coronavirus and regulatory crackdowns take toll

  • More Chinese are abandoning their search for once-coveted private sector jobs and pursuing a stable career in the public sector
  • The job market has undergone big changes in the past two years amid a virus-induced economic slump and regulatory tightening
China jobs

Zhang Qijing left China for the United Kingdom in October last year to pursue a master’s degree she hoped would help her change her career path. Business at the inbound travel agency she worked for was decimated by coronavirus pandemic travel restrictions and she wanted a fresh start.

A higher degree would give her an edge in the labour market and help secure a more stable job as a public school teacher, she said. Pursuing further education seemed like an efficient way to wait out the pandemic too.

But when the 26-year-old returned home a year later, armed with a new diploma, she found herself in the middle of cutthroat competition, as top talent – both new graduates and workers laid off by private companies – abandoned their search for once-coveted private sector jobs and pursued more stable career prospects as public servants.

“The competition wasn’t nearly as intense before the pandemic, especially because people previously working for tutoring organisations now want to work in the public school system too,” said Zhang, who to boost her job prospects has taken dozens of tests for public sector jobs, as well as exams for a teacher’s qualification certificate.

“Now everyone wants to play it safe. The growing number of outstanding candidates keeps raising the bar, and the interviewees for public schools all have master’s or doctoral degrees from [top universities such as] Tsinghua or Peking.”

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In July, the government cracked down on the after-school tutoring industry, leaving tens of millions of workers with an uncertain future and tens of thousands more jobless.

Young workers bore the brunt of the regulatory clampdown, with more than 70 per cent of jobseekers in the education sector aged under 30, according to data from Zhaopin, a Chinese online recruitment platform.

Still, in July 60 per cent of those searching for jobs said they wanted to stay in the industry, while the rest were turning to administrative, human resources and sales, according to a Zhaopin report published in August.

The shake-up in China’s labour market has gone beyond the education sector, however, with regulatory tightening also hitting the tech and entertainment industries, and a pandemic-induced economic slump squeezing opportunities among small businesses and in the service sector.

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Video streaming service iQiyi could lay off 20 to 40 per cent of its workers, Chinese media reported, while Kuaishou will cut 30 per cent of its global business units. E-commerce platform Mogujie is set to slash 80 per cent of its tech department.

Real estate companies are also shedding employees as the property market contraction continues and investment growth decelerates.

Meanwhile, the number of applicants for China’s civil service exam topped 2.12 million this year, almost a third more than last year’s 1.58 million.
State-owned enterprises are the first choice of employer for 79 per cent of top university graduates, according to a survey published earlier this year by HR service provider 51job.com.
With the impact of the pandemic, we found the whole labour market is shifting, and all workers, especially the younger ones, are pursuing stability
Li Qiang

The number of people looking for government and public sector jobs as their top career choice doubled compared to last year, according to another Zhaopin survey, said Li Qiang, executive vice-president of the recruitment service.

“This is a reflection of the economic environment,” Li said.

“With the impact of the pandemic, we found the whole labour market is shifting, and all workers, especially the younger ones, are pursuing stability, which means the overall direction of economic development also leans toward increasing stability and solidity.”

Long-term stability is outweighing short-term benefits for some jobseekers, who do not want a highly-paid position at an internet company only to be laid off later, said Bo Zhuang, China economist at Loomis, Sayles & Company, an investment firm.

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“It could hurt China’s economy,” Zhuang said.

“Politics is full of a bunch of mediocre workers, as some say in the West. It truly is a waste of labour productivity, because when they are stuck in a system that is more rigid and bureaucratic, they become less innovative.

“Whereas the private sector might demand longer hours, but they also implement more ideas and generate more value for the society.”

As competition for jobs intensifies, the number of people hoping to gain an advantage with an additional degree has jumped. A total of 4.57 million people applied for the postgraduate entrance examination this year, according to the Ministry of Education, 800,000 more than last year.

Looking ahead, Li said the job market will grow steadily, but it will face pressure.

Structural problems remain due to a mismatch between young jobseekers unwilling to work blue collar jobs and companies in the industrial and construction sectors desperate for workers.

It’s not that the market lacks posts, the key is that people need to adjust their expectations
Li Qiang

The unhealthy expectations of young workers and a reluctance to settle contributed to an unemployment rate for 16 to 24 year old’s of 14.3 per cent in November, up from 12.8 per cent from a year earlier.

Overall employment improved slightly compared to last year, and remains similar to pre-pandemic levels. The average monthly unemployment rate in the first 11 months of 2021 was 5.1 per cent, down from 5.6 per cent last year. In 2019, the monthly unemployment rate fluctuated between 5 and 5.3 per cent.

China is expected to see 10.76 million university graduates in 2022, 1.67 million more than this year, according to the education ministry, which will add further pressure on the job market.

While there is an overflow of graduates seeking office jobs, factories are facing a shortage of workers.

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“Competition for secretary or administrative jobs is fierce, but the starting salaries might only be 3,000 to 4,000 yuan (US$627),” Li said.

“But if you look at the blue collar markets, one can easily become a quality inspector or assembler at a semiconductor manufacturer after three weeks of basic training, and maybe get paid 8,000 to 9,000 yuan a month, but many still prefer to work at a front desk over a factory job.

“Part of this problem can be solved when society can perceive all jobs as equal, and when occupational education is encouraged so that more people can choose an alternative path where a college diploma is not a requirement for employment.

“It’s not that the market lacks posts, the key is that people need to adjust their expectations.”

Age discrimination against women and people above 35 years old is another factor driving people away from the private sector.

I am scared I will be replaced by younger people after I am 30 years old
Zhang Jiuqing

“I don’t want to be a millionaire, I just want a normal and secure life where I can feel comfortable to have a baby,” said Zhang Jiuqing, a 26-year-old who lost her job as a German teacher after the regulatory crackdowns.

She has witnessed female coworkers quit after having children because they could no longer work overtime or stay competitive with younger or male counterparts.

“I am scared I will be replaced by younger people after I am 30 years old, or the country will just kill the whole industry,” she said.

She is now unemployed and preparing for the civil service exam, which she will keep trying to pass until 35, the upper age limit for application.

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Widespread age discrimination in China’s job market has gained more attention recently, with economists saying it could have potentially serious economic consequences as the population rapidly greys and its workforce shrinks.

However, Li said age does not need to be a limiting factor if workers can establish core competency before they turn 35, when they typically shoulder more family responsibilities and demand a higher pay.

“The solutions for workers aged 35, 40 or even 45 are the same. In a competitive commodity market, if they have nothing special to sell for or don’t have a target market, they are bound to meet a blockage, or they need to adjust their expectations”

“[In China,] coders infamously risk being laid off after 30 or 35, but they are essentially blue collar workers doing white collar jobs, that can be easily replaced with younger and lower paying workers.”



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