Chinese provinces try to boost youth employment by offering state-owned enterprises incentives to hire more graduates
- The country’s youth unemployment rate has been rising steadily, reaching 21 per cent before the government announced it would stop publishing figures
- Two provinces have told state firms to make sure at least half of their new hires are recent graduates, while others are offering subsidies or extra funding
Several provinces in China are urging state-owned enterprises to hire more college graduates to help tackle the rise in youth unemployment.
The country’s economy is currently struggling to recover following the impact of the Covid-19 pandemic, with the jobless rate among those aged 16 to 24 consistently breaking records.
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The problem is compounded by record numbers of college graduates entering the job market in recent years, rising past the 11 million mark this year, prompting the government to mobilise resources in the hope of creating more jobs for the new labour market.
Among the measures taken, the authorities in two provinces – Anhui and Guizhou – have asked state-owned enterprises to ensure that at least half of their new recruits are fresh graduates.
Meanwhile, in the central province of Hunan, graduate recruitment has been added to the annual performance appraisals for executives at state companies.
These firms have been told that the number of graduates hired this year must exceed last year’s totals “by a certain extent”, while state-owned enterprises directly supervised by the provincial government must hire at least 4,700 graduates.
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The State Council, the country’s cabinet, said in April that companies will be given a one-off payment – usually 1,000 yuan (US$138) – for each job they give to a graduate who has been out of work for more than two years, or youths who are registered as unemployed.
Recently, several provinces have also announced further incentives.
Guangdong, the economic powerhouse of southern China, said last week that it will provide subsidies, ranging from 5,000 to 10,000 yuan to companies that offer both jobs and internships in selected parts of the province.
Guizhou also offers preferential treatment in areas such as research funding and professional appraisals to state firms which are able to offer more jobs for graduates this year compared with 2022.
The private sector, a key driver of economic growth, job creation and innovation, has lagged behind the state sector in post-pandemic recovery this year so far.
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Official figures show that state companies’ industrial output rose 4.3 per cent in the first seven months of the year compared with the same period in 2022, compared with 2 per cent in the private sector.
Meanwhile, the state sector also saw fixed asset investment rising by 7.6 per cent in the first seven months, while investment in the private sector dropped by 0.5 per cent.
