China expands state jobs for graduates as coronavirus hits private sector

Around 8.7 million Chinese students are graduating this year

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New Delhi : China's thousands of state-owned enterprises, local governments, and public institutions are expanding hiring as a record number of students graduate into a job market left reeling by the COVID-19 pandemic.

Job stability for the young is a longstanding political concern in China. President Xi Jinping, who has previously warned that struggling graduates could "turn into negative energy," is urging more hiring.

Around 8.7 million Chinese students are graduating this year, almost half a million more than last year, heading into an uncertain future as private firms rein in recruitment.

Graduates, who generally enter the workforce in June or July, face a "severe" situation, officials have said. Available positions for them in the recent pre-graduation spring recruiting season fell by 22% on year, according to BOSS Zhipin Research.

State-owned enterprises, local governments, and public institutions, known collectively as "the system", are responding to Xi's call.

While China's GDP bounced back into growth in the second quarter, surveyed unemployment of graduates aged 20-24 was more than three times the rate for the broader population, rising to 19.3% in June, 2.1 percentage points higher than May.

Oil giant Sinopec Corp is more than doubling its 2020 recruitment numbers, with an additional 3,500 positions for new graduates.

"Clearly, initiatives such as this run counter to the idea that China's SOEs are run on a purely commercial basis," said Louis Kuijs, of Oxford Economics. SOEs, which enjoy privileged access to certain sectors, have a "special responsibility" at times, he said.

Government schemes sending young people to work in less developed areas of China have also been bulked up: one, where graduates help with poverty alleviation and other community support, has 5,000 more places than last year.

Thousands more graduates than in 2019 will be granted passing grades in the highly competitive civil service exams, mainly held in the summer. Central Hubei province has increased its quota by more than 40%, while the northern region of Inner Mongolia has more than quadrupled its quota.

Efforts to directly soak up labour are limited as China's private sector accounts for 80% of urban jobs. But SOEs have also been told to help employment indirectly by promptly paying and reducing costs for smaller companies, said Andrew Polk, a partner at Trivium China, a research advisory.

SOEs have been pivotal in driving China's supply-led economic recovery amid the pandemic, although demand has not kept up, Polk said.

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