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Tough job market for over three million college students: official

A dismal job prospect is expected to unfold itself for China’s numerous college graduates, as over three million college students could fail to land a job this year, some official estimated in a press conference yesterday.

The figure was revealed by Wang Yujun, a senior official of the Ministry of Human Resources and Social Security, in the media briefing for the annual report of the reform and development of China’s social security.

Against the backdrop of a record high number of graduates nearing seven million this year, more than three million college students could probably not find a job before graduation, said Wang.

She claimed that the estimation is made by taking into account of the initial employment rate which exceeds 70 percent in previous years.

The initial employment rate refers to the percentage of graduates who have secured a job before leaving the campus, which also encompasses those who have enrolled as post-graduates or by a foreign university.

The employment difficulty is caused not only by the nation’s education mode and students’ career vision, but also the quantity and quality of the job vacancies at present, Wang added. She predicted that the situation can hardly get better in a few years to come.

Job opportunities in China at lowest level since 2010

Employers in China are decreasing their expected hiring, shows a recent report by the recruitment firm Hudson. They estimate an index, measured through interviews with employers, that tracks the expected hiring for the next quarter.

The figures for the third quarter of 2013 are reported as the lowest since the beginning of 2010.

Fewer jobs and more applicants

Bi Lin, joint general manager for Hudson in Shanghai explains the reasons he sees for such a reduction. In an interview with China Daily he says, “The government’s support of quality growth has resulted in a slower rate of growth, as many organizations are focusing on achieving internal efficiency and productivity gains in the first instance rather than adding headcount.” Of the 816 companies interviewed by Hudson, 13.2% said they would reduce their headcount in the next quarter. This is a 6.2% rise over the previous quarter.

The problem for job applicants is twofold. Along with the predictions from Hudson of declining recruitment, there are also a rising number of applicants for positions. This is blamed on several factors, including the closing of a number of export-focused companies amidst economic difficulties globally, and also an increase in the number of Chinese currently overseas returning to China due to the same economic difficulties.

Differences across the sectors

The hiring and job situation is quite mixed amongst the different sectors of the market. The Hudson report identifies stronger hiring intentions for highly qualified and specialized workers, in particular those in research and development, chemicals, healthcare, laboratory roles, and digital marketing.

The property and construction sector is seen as the industry with the most opportunity, with strong growth in hiring. This is due to the continued strength of commercial and retail property, with a strong domestic demand unaffected by overseas economic difficulties or tightening regulations for overseas capital in China.

Healthcare, too, has strong potential. 71.2% of respondents in this sector indicated increased hiring intentions for the next quarter. Bi explained that this is due to the upcoming plans of a number of global pharmaceutical companies currently establishing research and development centers in China increasing their demand for employees.

Specialized newsrooms abuzz on WeChat

Social media cater to public demand for concise, customized information

Lu Jiuping starts working at 4 am every day, but the retired 50-year-old businessman has never made a cent from his current occupation.

He starts his day by reading several financial websites, picking out valuable bits of business or IT news.

Not satisfied to digest the information alone, he posts these news items on “Tearoom 90”, an official account he registered on WeChat, a popular mobile social networking platform developed by Chinese IT giant Tencent.

Since it was set up in February, Lu’s free subscriber service has attracted a readership of more than 14,000, quickly turning it from a “tearoom” to a “newsroom”, much to the delight of the amateur media strategist.

“I am working as the chief editor of an e-magazine,” Lu said.

The Official Account is one built-in WeChat function that offers broadcast messaging. Operators of each account can share anything in any format with their subscribers and receive instant feedback.

According to Tencent’s website, the platform was originally created for big brands, such as airlines, banks and celebrities, but it has unexpectedly struck a chord with the public and citizen reporters, like Lu, who are taking advantage of the platform to develop specialized storytelling styles.

In the past few years, Sina Weibo, China’s most popular Twitter-like service, has exploded in popularity. Millions of Weibo users use the service to speak their mind.

Platforms such as Sina Weibo and WeChat are changing the way media work, with netizens now discovering and discussing social events online.

However, spam and misinformation have grabbed onto the coattails of the service, and people are getting tired of irrelevant or boring micro blogs that pop up on their screens all day.

Lyu Xin, dean of the New Media Department of Animation and Digital Arts School at Communication University of China, described this as the “parabola” of social media development.

He said that the rise of micro-blogging inspired people from all walks of life to voice their opinions on social issues, breaking down traditional media’s long-held domination over the spread of information and speeding up information transmission.

As they become increasingly immersed in social media, however, users find that it gets “boring” to sift through massive amounts of irrelevant information to find news that interests them. Instead, they prefer to spend their time perusing concise and well-organized information delivered to them directly.

“The parabola has reached its peak, and it will go down,” said Lyu, “but people’s demand for social media will go up.”

The professor attributed the popularity of WeChat to the platform’s ability to push content that meets public demand.

“In the social media age, no dish suits all tastes. People need more information to serve their personal interests. The Official Account on WeChat provides a venue for both institutions and individuals to publish their personal information,” one blogger wrote.

Lu’s case helps to illustrate that point.

He describes his “Tearoom 90” as a professional business magazine. “My target customers are industry insiders, and those gossip girls or boys have little interest in following.”

The customized information helps to attract people with shared interests to subscribe, but subscriber-only content, which only subscribers can read or comment on, could be used to broadcast false information.

Many national newspapers, magazines and websites have also landed in the platform.

In April, China Central Television, a State-owned broadcaster, launched its official WeChat account “CCTV News” to spread news reports and photos, as well as receive reader comments.

Government departments have also opened accounts for hearing opinions from the public. According to a report released in May by Tsinghua University, the number of government accounts on WeChat has reached 1,000 across China.

Spending linked to social security

Many people were surprised to find that China’s average individual savings had reached 77,623 yuan ($12,645). But no matter how high or low the figure is, Chinese people are not likely to exchange happiness for consumption, says an article in Beijing Morning Post. Excerpts:

The announcement of the national average individual savings data could be demoralizing for people who don’t have that sort of savings. In fact, many netizens have made fun of the latest savings data by saying that they will try to catch up with the national average by surviving without food and drinks.

The average savings rate may not mean much in times of wide differences in consumption, financing, investment and earnings, especially when depositing money in banks has become the least lucrative means of wealth management.

As a country that tops the global savings rate, China has a huge number of people who are reluctant to spend more and thus boost domestic consumption to help the country’s economic growth. If savings is only about mere accumulation of money in banks, wealth management will not help national economic development.

Chinese people will really feel happy when they have enough in bank deposits even after spending more than usual, which means they should have enough cash in hand or bank to deal with emergencies, such as paying for housing, medical care and their children’s education.

Therefore, only if the government increases its input in social security will Chinese people spend more instead of depositing their money in banks.

Jobless graduates may exceed 3 million

Over 3 million graduates in China are struggling to find jobs this year, according to a report on China’s social security, released on Sunday.

With nearly 7 million graduates this year, and adding on the unemployed students from previous years, the number of graduates struggling to find jobs before leaving school is estimated to have reached over 3 million, said Wang Yujun, from the Ministry of Human Resources and Social Security, at a press conference for the “2012 China Social Security Reform and Development Report”.

The report also said that delayed retirement is not a viable option at present, as the current conditions are insufficient.

The job market is unable to fulfill the demands of job hunters, with 30 percent of new job vacancies coming from the retired, according to Professor Deng Dasong of Wuhan University.

In China, calls are being made to delay the retirement age from 60 to 65, as the aging population continues to grow rapidly.

Plight of Chinese hawkers highlights impact of downturn

Every year the scorching Chinese summer brings throngs of unlicensed vendors out on to the streets, hawking everything from pirated DVDs to watermelons.

Given their lowly and illegal status they are often treated poorly by the authorities, but this year has been particularly bloody for this army of mobile shopkeepers.

Two weeks ago, Deng Zhengjia, a 56-year-old watermelon vendor, was killed and his wife knocked unconscious after they were attacked by the local “chengguan” – an auxiliary police force tasked with keeping city streets clean and orderly.
Since then there have been a dozen similar incidents reported across China in which “melon-peasants” (as they are referred to in Chinese), street hawkers, journalists and even police officers have been beaten up by locally-employed chengguan.

Chengguan brutality is not new, but experts say rising unemployment, particularly in the low-end export-orientated manufacturing sector, is driving up the number of vendors and prompting many more confrontations on the streets.

“The economic downturn has caused an increase in the unemployed and low-income populations and they have to return to the labour market which inevitably increases the conflict between chengguan and street vendors,” says Qiu Jianxin, an expert on the chengguan at Nanjing Aeronautics and Astronautics University.

Official Chinese unemployment data are virtually meaningless as they do not count the country’s hundreds of millions of migrant workers. According to a government manufacturing sector survey published on Thursday, however, employment in the sector has contracted for 13 months. A separate survey published by HSBC showed that the number of workers in the manufacturing sector shrank in July at its fastest pace since March 2009, with expectations of further job cuts.

The government has said 7.25m jobs were created in the first half of the year. But another survey from the Ministry of Human Resources and Social Security found that the number of new urban jobs fell by 5.7 per cent in the second quarter from the same period a year earlier.

“The employment situation is weakening in China,” says Zhu Haibin, chief China economist for JPMorgan. “The service sector is creating some jobs to hold up the overall labour market conditions but low-skilled manufacturing employment is particularly weak.”

A researcher at a government think-tank, who asked for anonymity, estimated that in some export-orientated manufacturing zones in south China one-third of migrant workers were still employed in factories, another third had switched to employment in the services sector while the final third had returned home to the countryside.

This balancing effect means China has not yet seen widespread net lay-offs despite three years of steadily slowing growth – from almost 12 per cent expansion in early 2010 to 7.5 per cent growth in the second quarter this year.

Without the pressure of massive unemployment the government has been unwilling to launch a major stimulus package to boost the economy as it did in late 2008 in the face of the global financial crisis. But the overall employment figures disguise the shifts that are occurring in the labour market and the potential dangers for China’s stability-obsessed government.

As news of Deng’s death in central China spread on social media, it caused outrage throughout the nation that was even expressed in official media outlets.

Local government officials in charge of the chengguan initially claimed he had “suddenly fallen to the ground and died”. But Beijing soon ordered the arrest of the officers involved and arranged for his family to receive a large payout.

“The government paid off the family quickly to shut them up because they are very worried this incident could spark wider protest or some sort of popular movement,” says Yang Jisheng, deputy editor at the reformist magazine Yanhuang Chunqiu.

Apart from there being fewer available jobs in the manufacturing sector there is also a mismatch between the jobs available and the skills and ambitions of those entering the workforce.

“There are studies that show a connection between unemployment and the number of street vendors in China,” says Ye Tan, a popular columnist who has written extensively about the chengguan. “But for many vendors the problem is not that they can’t find a job, but that they are unwilling to work long hours in high-risk manufacturing jobs.”

Because street vending is the main source of income for many of these migrants, the stakes are high when they are caught by chengguan, who regularly confiscate all of their wares and income. The chengguan often ask for protection money from vendors and regularly conduct street raids that can sometimes turn violent.

Just one day after Deng was killed, another melon vendor in northeast China was beaten up by chengguan in his city, in an incident that was captured on camera phones by witnesses. The footage was replayed by a regional state-controlled TV station whose journalists were themselves attacked by chengguan on camera when they went to the chengguan’s offices to check the facts of the case.

A week later, a police officer was reportedly beaten and had his pistol grabbed by a group of chengguan in western China after he was called to an incident in which the chengguan were attacking people.

China’s high employment levels: adapting their workforce to a fast-changing market

China’s quickly evolving job market is booming and the results of Antal’s 2013 Q2 employment survey on various companies reflect an intent on increasing work efficiency and discovering fresh talent.

In the latest ‘Global Snapshot’ survey, 10,000 organisations in Europe, Africa, India, China and the USA were asked whether they were currently hiring or firing at professional and managerial level.

The survey then went on to identify if businesses planned to do so in the coming quarter.

The results for China were very positive, with a massive 75 per cent of Chinese employers recruiting or replacing staff at senior levels this quarter and 74 per cent planning to hire next quarter, in stark contrast to only 54 per cent expecting to hire in the Q1 edition of the survey.

This demonstrates a significant increase in hiring confidence for replacement and growth positions, as employers clearly defined their intentions and goals for the year.

However, with such an active recruitment market, there was also an increase in the number of companies firing employees.

Consistently high recruitment growth combined with increased labour costs has made employee performance as important as ever, and subsequently replacement recruitment is increasing.

During this quarter, the number of businesses firing staff rose from 14 per cent to 26 per cent, and the numbers are expected to continue increasing over the next three months.

On average, they remain 5 per cent higher than that of APAC. However, this should only be considered in tandem with similarly high hiring levels.

According to James Darlington, head of Asia at Antal International, “there is an increase in cautiousness among job seekers and employers which, together with a changing economy and the necessity for more adapted profiles, explains high recruitment and lay-off rates.”

In a globally stabilised job market, employers prefer higher quality talent, rather than higher quantities.

Furthermore, in many multinational corporations (MNCs), the repatriation of foreigners holding management positions is a significant phenomenon, and many businesses have not found local replacements yet, meaning employee quality is of the utmost importance.

Notably, some industries are booming, while others are lagging behind. The nationwide salary increase over the last two years has led to higher disposable incomes, with the performance of consumer-led sectors having benefited the most.

According to the survey, this quarter’s hiring champions were as follows: the automotive industry (92 per cent), retail & luxury goods (91 per cent), and health care (88 per cent).

Interestingly, the health care industry plans to fire 27 per cent of its employees this quarter, followed by the automotive industry (20 per cent) and luxury goods (8 per cent).

Clearly, specialists in these fields are highly sought after in the country. Demand in these areas is expected to remain high, with sales and marketing, IT and accounting, and R&D being the most demanded positions.

The automotive and aerospace industry “needs specific technical profiles who are bilingual in English” as well as “[a] high level [of] experienced sales talent, professionals with innovative views of the market and marketing experts with challenging and international vision”.

In the luxury good industry, “employers attach great importance to English skills compared to other professional skills” as many youth brands are booming in Beijing and Shanghai.

Due to a growing economy and “more products [are] produced to satisfy people’s daily lives”, the health care industry is “hiring more staff to support business expansion and the influx of foreign companies [into] China.”

As disposable income continues to rise, it is natural for auto and retail industries to continue performing strongly.

This, combined with persistent stagnancy in European markets, means that the major players in these industries will continue focusing their attention on China, thus leading to potentially increased hiring.

The survey reflects accurately what we see and hear from our clients on a daily basis. The talent war in China is continuing to heat up, with many companies prepared to break budgets or head count freezes to hire top level talent.

However, as the market gains in maturity, both employers and candidates are expected to put more emphasis on training and development rather than salary when negotiating a package.

As the world’s second largest economy and a quickly developing labour market, China is now hiring fewer, but “better” people, with HR managers having a clearer vision of their demands for this year and higher expectations on the talents that will drive their business into this challenging but formidable market.