Graduate job applicants in China today fall into one of three categories, says Julia Zhu, director of recruiter Robert Walters China.
Some have rare skills that are in high demand in the tech or green energy sectors and are able to secure high salaries. But a second group feels helpless. Their skills do not match the economy’s needs. “There are things that they cannot control and the market is going down,” says Zhu.
“There is another portion who have just given up,” she adds. “They just stay at home and hang around and accept that they will have this kind of gap year for two or three years.”
Their prospects are in stark contrast to President Xi Jinping’s “Chinese dream” of turning China into a high-income nation. Youth unemployment hit a record high of 21% in June, China’s growth model has broken and economists warn the nation is teetering on the edge of a debt crisis.
“This economic downturn is unprecedented in the last 40 years,” says Lance Gore, senior research fellow at the National University of Singapore’s East Asian Institute.
Instead of meeting the 5pc GDP growth rate Xi is targeting, China is starting to look increasingly like Japan did in the 1990s. Back then, a bursting asset price bubble triggered Japan’s “lost decade” resulting in a 30-year period of stagnation. Economic growth slumped from averaging 4.5% year-on-year through the 1980s to 1% ever since.