When Sam Gu was admitted to college four years ago, his parents were ecstatic. His father, an electric welder, and his mother, a cleaner at a hotel in Gu’s hometown of Wuxi, a small city near Shanghai, hoped that their son would vault into the middle class. But the family’s first college graduate is facing a grim job market in a country that desperately needs to employ its best and brightest in order to avoid social instability and trigger a further economic slowdown. “I want to get a job, but the reality is that I do not know where I can find one,” says Gu. “As far as I know, none of my 45 classmates has found a job. This is so frustrating.”
This year almost 7 million college graduates will pour into China’s job market, the highest number ever recorded in the People’s Republic’s history. By the end of April, only 35% of soon-to-be college graduates had found jobs, according to a survey by MyCOS, a data firm in Beijing. Postgraduates were faring even worse, with merely 26% having signed an employment contract. The problem is so severe that it even drew the attention of Xi Jinping, China’s recently named President, who in May met with soon-to-graduate college students in the port city of Tianjin, encouraging them to take even the most grassroots jobs and to “issue extraordinary performances in ordinary job situations.”
The high unemployment rate among college graduates has several causes. In 1999, the Chinese government decided to expand the country’s higher-education system, in part to stimulate a weak economy still feeling the effects of the Asian financial crisis two years earlier. In 2003, China had 2.12 million university graduates; a decade later, the government estimates the number will reach 6.99 million, the highest in the country’s history.
Yet just as the number of graduates keeps soaring, China’s economy is decelerating. China’s GDP registered 7.7% growth, year on year, during the first three months of 2013, 0.2% lower than in the final quarter last year. Growth that’s just a shade under 8% might sound mighty impressive to many economies struggling with recession, but China, as its leaders have repeatedly stressed, needs such buoyant numbers just to keep its head above water economically. No surprise, then, that only 55% of Chinese companies surveyed by consultancy Mercer said they have campus-recruitment plans for this year. In 2012, 77% had recruited fresh graduates through job fairs and other avenues.
As a transport student at the Wuxi Institute of Communications Technology, a half-century-old institution near Shanghai, Gu hoped to find a job at the local subway company. “When I enrolled in college, I was told that all my classmates would be hired by the local subway company,” Gu tells TIME. “But the local subway company doesn’t have any recruit plans this year.”
Hoping to take advantage of his impressive English skills — he honed a colloquial style by watching American TV shows — Gu then tried for a job at English-language training schools. “When I went for the interview, I found out that most of my competitors were master students or even doctoral students in English,” he recalls. “The competition is so severe that it makes me feel desperate.”
Exacerbating the situation is the overall quality of China’s higher-education system. Chinese colleges may have proliferated over the past decade, but are all these diplomas worthy? “China’s universities are controlled by the government,” says Xiong Bingqi, the vice director of the 21st Century Education Research Institute, an independent think tank in Beijing. “Without university autonomy, the higher-education system cannot teach students how to think independently. As a result, every graduate looks similar, and they do not have core competitiveness and innovation skills.”
Despite more than three decades of market reforms, China’s economy, especially in the service industry, is still dominated by inefficient state-owned enterprises. Private companies, for instance, are totally blocked from the oil, financial and telecom industries. The same goes for the logistics business. “The service industry can absorb more college graduates than the agricultural and manufacturing sectors,” says Xiong. “We should introduce more competition by allowing private companies into the service sector, so there are more job opportunities for the graduates.”
For Gu, the struggle to find a job continues — and he worries about becoming yet another member of the so-called ant tribe, the young, educated underclass barely eking out a living in China’s big cities. Compounding matters, he, like so many of his generation, is an only child, and knows that his parents are counting on him for support after their retirement. “I’m so jealous of those people working in beautiful office buildings,” he says. “I’m very confused and do not know what I will do in the future.”