China's job scarcity sees fresh grads shun private sector for stable civil service jobs, as ‘government is too big to fail'

a series of stories, expanding the job market, notorious work culture, occasional media stories

This is the fifth in a series of stories on China’s job market, looking at its history, the role of migrant workers, inequality and the future for its graduates entering the workforce.

A gruelling two-month stretch awaits Adam Xu later this year, and he has a stable government job in his crosshairs.

In addition to the classes he is taking as a master’s student in public administration, the 25-year-old has ambitious intentions to set aside at least 12 hours a day to study for the national civil service examination that will take place in November.

His hope is to return to his hometown – a second-tier city in southern Guangdong province – for a civil service position.

Xu epitomises the shang’an mentality, which literally means “going onto the shore” and describes a growing desire among young people to take jobs in the public sector. The expression is the opposite of a school of thought popularised by his parents’ generation: xiahai, or “going down to the sea”, referring to a movement during China’s period of reform and opening up that began in the late-1970s, when droves of people quit their government positions to become entrepreneurs and explore a “sea” of business opportunities.

“There is not enough water in the sea now, so who will still xiahai?” Xu posited. “Our generation doesn’t even have a swimming pool.”

Amid skyrocketing living costs, increasingly unbearable working pressure in the private sector, lingering uncertainties brought on by the coronavirus pandemic, and fast-changing internal and international environments, more and more Chinese graduates are vying for government jobs – known as “iron rice bowls”, because they offer guaranteed job security, steadier income and benefits, and a more predictable future.

That’s exactly what Xu is looking for when he graduates next year. But he knows it won’t be an easy undertaking; the competition is fierce.

A total of 1.576 million applicants sat last year’s national civil service examination, vying for 25,726 positions – meaning just one out of every 61 test-takers ended up reaching the “shore”. The most sought-after position was with the Guangdong branch of the National Statistics Bureau, with 3,334 applicants striving for one spot.

Fresh college graduates are a significant driver of China’s civil service fever. In a survey conducted by job-hunting website Zhaopin in April, 11.4 per cent of new graduates said they hoped to get a job in the government, double the proportion of last year. At the same time, the percentage of graduates seeking jobs at state-owned enterprises – the top choice among those polled – also increased from 36 per cent last year to 42.5 per cent.

“The mentality of pursuing stability is stronger among graduates in the post-pandemic era,” said Wang Yixin, executive director of public relations at Zhaopin.

That mindset is also prevalent among graduates from elite domestic universities, as well as those with overseas degrees. In the past, these graduates tended to pursue higher-paying jobs in the private sector.

A survey conducted last year by research and consulting firm Ipsos showed that almost half of China’s overseas graduates who secured jobs ended up in the public sector, which comprises civil service, state-owned enterprises and all other publicly funded institutions.

Last summer, a recruitment list from a subdistrict government in Hangzhou, the capital of Zhejiang province, went viral. Eight graduates ended up securing entry-level positions in one of the smaller administrative jurisdictions in China’s government hierarchy, and each of them had a master’s degree from one of China’s top two universities, Peking or Tsinghua.

The frenzy appears to have intensified this year as the country is struggling to find jobs for all those who want them, and this has been exacerbated by the lingering impact of the pandemic. The situation keeps getting worse for fresh graduates, as more than 9 million students graduated this year – a record high.

The urban unemployment rate for people aged 16 to 24 was 15.4 per cent in June – more than triple the 5 per cent rate for the entire urban working population, and the highest percentage since September, based on figures from the National Bureau of Statistics.

That group primarily comprises fresh graduates of high schools, vocational schools and universities, according to Guo Lei, principle economist at GF Securities. “The historical average of this figure is 12.5 per cent,” he said in a note earlier this month.

The “structural gap” caused by the increasing supply of graduates and diminishing employment opportunities amid the pandemic is the main reason behind the rising rate, Guo said.

Zhaopin’s Wang also pointed to the mounting pressure these graduates face in their job search.

“They are not just competing with their peers from this year, they are also competing with last year’s graduates who haven’t landed on a job yet, as well as those who have lost their job during the pandemic and need to re-enter the employment market,” she said.

China has made stabilising employment and expanding the job market top policy issues since the pandemic began. And providing support for university graduates was identified as a priority for this year.

But the private sector, which generally absorbs most graduates during normal times, has been hit hard by the pandemic. In particular, small and medium-sized enterprises, which account for more than 90 per cent of employment according to official figures, continue to struggle due to rounds of lockdowns and high raw material prices.

“Within a short period, like one or two years, the mentality of [jobseekers] prioritising stability won’t change much,” Wang said. “It is mainly due to the general atmosphere of [economic] uncertainty.”

This helps illustrate where Xu’s head is at ahead of the civil service examination. After the test syllabus comes out in October, he is even planning on signing up for an exam-preparation course, and he has already singled out a Shenzhen-listed institution that advertised heavily on huge billboards near his undergraduate campus.

Just a couple of years ago, Xu recalled, the dream jobs for fresh graduates were almost exclusively in the private sector. Tech giants and leading property developers were the top choices.

“Who would still feel proud if they get into Evergrande or Wanda now? Everyone wants to shang’an now,” he said. “Times have changed so quickly.”

The private sector’s relatively high salaries are undeniably attractive. But the notorious work culture that tech giants have become infamous for – often referred to as “996”, meaning one must work 9am-9pm, six days a week – has made those positions less appealing in the eyes of many young people. It doesn’t help when they see occasional media stories about tech employees having heart attacks or committing suicide.

After applying for positions at almost all of the companies that own the most popular apps in China, Jack Yuan concluded his job-hunting season with four offers. A major e-commerce platform offered him a position as a programmer, with a pre-tax monthly salary roughly four times as high as the average for fresh graduates with at least a master’s degree. That average was 7,337 yuan (US$1,135) as of 2020, according to data from Zhaopin.

But he will work at least 12 hours a day, six days a week, with considerable overtime during peak shopping seasons. After doing the maths, he said the pay seems much less appealing, particularly given the impact these long hours will have on his private and social life.

“This working model with long hours is unsustainable,” Yuan said. “How can you date working 12 hours a day and six days a week? If you are lucky enough to have a wife and kids, your family will fall apart if you work like that.”

With a bachelor’s degree from an elite Chinese university and a master’s degree in engineering from an overseas university, Yuan has the luxury of choice. But the vast majority of fresh graduates do not. With more big tech firms going public and becoming established in their domain, and with smaller players becoming increasingly squeezed out, the number of jobs in the sector has declined since 2018 while the recruitment criteria have tightened, according to Zhaopin.

“If you are not a graduate from an elite university, it would be hard for you to get past the résumé stage of recruitment,” Yuan said.

After all, the government is too big to fail

Adam Xu, master’s student in public administration

In that regard, Xu also noted that another upside of the civil service examination is that there are no diploma requirements for sitting the exam itself, so it may be easier to at least get one’s foot in the door, compared with a job at a big tech firm.

Meanwhile, one also has to factor in the government’s recent regulatory crackdowns on big tech firms, as this adds further uncertainties to the sector.

“And with a major in public administration, I don’t think my skills and knowledge are what the big tech would really value,” Xu said

Even though the salaries for civil servants are not as high, for Xu, the much better social welfare benefits those positions can provide – including housing, health care, education for children, and retirement benefits – offset the drawbacks.

“After all,” Xu concluded, “the government is too big to fail.”

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