Chinese youth rush for government jobs amid economic headwinds

Record numbers of educated young Chinese are flocking to government jobs for security reasons as the world’s second-largest economy faces headwinds that dampen prospects for private sector jobs.

Last month, some 3.7 million applicants nationwide took the annual civil service exam, including graduates of the nation’s top universities. But starting next year, only about one in 100 people are expected to be among the 38,100 entry-level government positions.

With private job opportunities dwindling amid the economic recession and deteriorating business confidence, many people were willing to take on these possibilities. Unemployment among urban residents aged 16-24 in China Remained above 17% since Julycompared to about 10% in the USA

Government jobs were once viewed as “iron rice bowls” due to their stability and fixed working hours. But as China’s economy has opened up, the country’s educated young people have raced to join domestic tech giants such as Alibaba, Tencent and Huawei, pursuing higher wages and more job opportunities in the private sector.

Now these “Iron rice bowls” are back again, as a prolonged economic slump and Beijing’s regulatory crackdown on certain parts of the economy, such as real estate, technology and tutoring firms, have led to large-scale layoffs in the private sector. Top 500 private companies in China reduced workforce by 314,600 people last year, according to an industry and trade association body.

Amidst the mismatch between available roles and expectations, job seekers are tempering their ambitions and seeking government jobs.

Take 22-year-old Coral Yang. He spent four months looking for a job before taking a position at a local marketing agency, but the offer was rescinded weeks later after the company canceled the position as part of cost cuts.

“There aren’t many open positions out there. It’s very sad to lose a bid after months of searching,” Yang said, “but it shows how unstable the private sector has become.” Yang, who graduated from a data analytics department at a top university in Shanghai, is now preparing to take the civil service exam next year.

He is not alone. A growing proportion of students ranked jobs in the public sector, including government agencies and government-backed firms, as their top career choice last year, rising to nearly 63% in 2024. up from 42% in 2020accordingly A survey conducted by recruitment platform Zhilian Zhaopin.

Wei Shan, a senior research fellow at the East Asia Institute at the National University of Singapore, said students in public sector jobs face better employment chances in state-owned firms with larger headcount compared to government institutions, making them a safer option given the low pass rates in government exams.

The number of graduates seeking employment in private enterprises decreased, falling to 12.5% ​​last year. 25.1% in 2020the survey showed.

Mingjiang Li, an associate professor at the S. Rajaratnam School of International Studies in Singapore, said rising uncertainty in the job market, layoffs and slowing wage growth in the private sector are pushing many young people to seek “the security, predictable benefits and social prestige of public service.”

Chinese Ministry of Education called Increasing employment in private enterprisesIt offers tax breaks, social security discounts and subsidies to encourage the hiring of young graduates. But the incentives are very low. For example, Shanghai municipal government only One-time subsidy of 1,500 yuan per new hire.

So the competition became increasingly fierce: approximately one 100 candidates will win In 2023, this rate was one in 70 people. The application-to-acceptance rate for certain positions in rural areas, where jobs were already scarce, was staggering. In 6,470 applicants.

“The competitive rate in some provinces now rivals that of the world’s most selective universities… it is quietly becoming one of China’s most competitive national sporting events,” said Han Shen Lin, a professor at New York University in Shanghai.

Record numbers of university and vocational school graduates — about 12.7 million – they enter the job market next year, making the race even tighter.

As part of its effort to provide more employment, Beijing further increased the candidate pool by raising the eligibility age by three years to 38 for those with a master’s degree and to 43 for those with a doctoral degree.

But still, “a significant portion of open positions are reserved for new graduates,” Shan said, estimating that about 70% of new hires this year are graduates, compared to less than 40% in 2019.

Meanwhile, fewer students are investing in graduate education. Candidates who will take the national postgraduate entrance exam The number in October dropped to 3.4 millionThat’s down from a peak of 4.74 million in 2023, reflecting declining confidence in advanced degrees and improving job prospects, according to the education ministry.

“The return on a graduate degree appears to be declining… the imbalance has led to the relative devaluation of the degree,” said Xu, adding that many students no longer view the extra 2-3 years of education as a guaranteed path to better employment.

Zhilian Zhaopin research He told a similar story. Vocational school graduates had stronger job opportunities; Last year, employment rates rose to 56.6%. Graduate students, meanwhile, have seen their chances worsen, with landing offers below 45%, down from around 57% in 2023.

Economists warn that the growing share of top university graduates clustering in the public sector rather than pursuing entrepreneurial or high-risk private sector paths could put pressure on long-term economic growth.

“Over time, this trend could reshape China’s talent landscape by reducing innovation dynamism in the private economy while strengthening the human capital base of the state bureaucracy,” RSIS’s Li said.