Friday, June 9, 2023

China’s economy is leaving behind its educated youth

May 23 (Dow Jones) — Earlier this year, two startling statistics emerged from China: the country’s annual economic growth had slowed to just 3%, a rate seen only twice in nearly 40 years, and After this there was a decline in its population for the first time. 1961.

Both figures highlight serious long-term challenges for Beijing, but a less notable statistic highlights a more dramatic and immediate problem: China is failing to adequately employ its younger and better-educated generation of workers.

Last year, Chinese unemployment for those between the ages of 16 and 24 hit a record 20% and more than doubled in 2018. The job shortage is particularly acute for graduates with advanced degrees, people who had more to expect from the labor market because their families invested up to a third of their income in their education.

According to a published survey, during the recruitment season last autumn, about 45% of recent college graduates in China did not receive any job offers.

The problem is not that there are not enough jobs in China. Rather, it is a deep mismatch between the education and skills of those entering the labor market and the jobs that need to be filled.

The manufacturing sector in China is facing severe labor shortages: four out of five Chinese manufacturers report that their workforces are falling 10–30% short of their needs, and the Ministry of Education calls for 30 million manufacturing workers by 2025. shortfall is estimated.

In high-tech sectors, a similar talent shortage threatens to hinder China’s ambition to lead the way and achieve technological independence. The semiconductor sector reported 200,000 open jobs that could not be filled this year. In the field of Artificial Intelligence (AI), the number of open jobs with no matching talent is huge, around five million positions. This is true even when China produces more science, technology, engineering and math graduates than any other country and almost twice as many as the United States.

Why are these youth not filling this gap? Born from the 1980s and known as the “New Generation”, they represent a radical break with the past. They became relatively prosperous and have become the most educated generation in Chinese history due to a 10-fold expansion of the higher education sector in the past 20 years. A quarter of the new generation hold a bachelor’s degree, compared to just 6% of those born in the 1970s.

This expansion of the education sector seemed like the right strategy for a country that had lagged far behind in that matter 20 years earlier. But education has left behind an economy that is still primarily based on manufacturing. Rather than advanced degrees, jobs such as operating complex equipment or operating automated systems require large-scale technical and vocational training. That is why, unlike the fate of the best educated, 95% of business graduates are getting jobs right after graduation. Meanwhile, high-tech companies compete for a narrow band of graduates with the right technical talent, while complaining that most candidates lack industry-specific skills or practical experience. Internships that could provide more of that foundation have not become part of the educational culture.

“Expansion of the education sector seemed like the right strategy for a country that had lagged far behind in that regard 20 years earlier.”

It turns out that diplomas haven’t necessarily translated into skills sought by the high-tech sector or smart manufacturing companies that China wants to promote. The Chinese education system was designed during a period when most students worked for state-owned companies. Today, their standardized test-taking skills and homogeneous-looking CVs rarely meet the market economy’s demand for real-world experience, mental flexibility and personal passion.

Part of the mismatch can also be attributed to a generational change in attitudes towards work. Growing up in an era of stability, growing prosperity, and relative comfort, most of the new generation want more from life than running a factory for a long time. Many of those who cannot afford to be unemployed take on jobs that they find unfulfilling. When it was reported that a third of new employees at a cigarette factory held master’s degrees from some of China’s top universities, the nation reacted with shock and concern.

A huge gap has arisen between expectations and reality. The glut of degrees has pushed the average starting salary of college graduates below that of those working in the gig economy, such as delivery drivers. Real estate, finance, and IT receive more job applications than they can begin to absorb, and leading online recruiting site reports that 90% of applications go to areas that account for 50% of their job openings. provide less opportunities than Young job seekers have to face one disappointment after another.

The consequences of low expectations among unemployed youth are dire. Members of the younger generation are increasingly putting off marrying and starting families, breaking with the traditions of Confucian society. In 2021, only 7.6 million new marriages will be registered, a 38% decrease from 2015. Meanwhile, the birth rate has fallen to its lowest level ever in the country.

The discontent among the new generation also represents a threat to the social stability of the nation. In the past, Chinese families, even those at the bottom, were content when income inequality increased, as people believed their children would have a better life. The erosion of such beliefs creates the danger of riots.

The Chinese state has responded to this growing discontent by reining in the housing market in an effort to make housing more affordable. Authorities have also tried to ease the anxiety created by the education system, limiting the amount of assignments and banning for-profit tutoring companies to increase competition for grades.

In view of the imbalance in the labor market, the government last year adopted a policy to increase the capacity and quality of vocational schools. This will help fill jobs in advanced manufacturing, but China’s service sector remains a problem in areas such as healthcare, entertainment and public services. It currently provides only 47% of the country’s jobs, compared to about 80% in advanced economies such as the United States. Beijing could accelerate the growth of the services sector by lowering barriers to entry and allowing more foreign participation to fill vacancies.

Nation World News Desk
Nation World News Desk
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