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Market intelligence for international student recruitment from ICEF
9th Aug 2023

Facing poor job prospects at home, Chinese students see the allure of study abroad

Short on time? Here are the highlights:
  • Youth unemployment is on the rise in China
  • 1 in 5 urban Chinese aged 16-24 were unemployed this summer
  • Chinese demand for study abroad appears to be rising in tandem with a slow post-pandemic economic recovery for China and an insufficient supply of desirable jobs for university graduates

China’s urban youth unemployment rate soared to 21.3% this past June and is expected to nudge upward to 21.4% by the end of Q3, 2023. This is a doubling of the rate just four years ago, and some analysts say that official statistics do not capture the full scale of the crisis. This is because the unemployment rate does not include the large segment of Chinese aged 16–24 who could work but who choose not to look for a job.

Simply put, Chinese youth are dropping out of the labour force at an alarming rate, and whether coincidentally or not, demand for study abroad among Chinese high-school and college-aged students is on the rise this year.

Where are the jobs?

Those who attest that youth unemployment is a far greater problem in China than official statistics indicate point to a recent trend among young Chinese of “lying flat” – i.e., doing very little, staying at home, adopting a minimalist lifestyle, and avoiding the labour market. The Chinese government counts only those who tried to get a job but failed in its unemployment calculation. If, as in the US, the number of those who were available for work but did not get a job were added to those who tried but failed to get a job, the youth unemployment rate would have been closer to 46% in June 2023.

The “lying flat” trend dovetails with a growing sense of disillusionment among Chinese teens and 20-somethings about education and career prospects in China. Writing in the New York Times this month, Claire Fu and Daisuke Wakabayashi report that at this year’s ceremony for the graduating class of Chongqing Metropolitan College of Science and Technology in southwestern China, college president Huang Zongming had this message: “You must not aim too high or be picky about work. The opportunities are fleeting.”

Mr Zongming’s statement echoes that of the Chinese president himself. Ms Fu and Mr Wakabayashi report:

“Xi Jinping, the country’s top leader, [has] said young people should strive to work in difficult and remote areas and learn to “eat bitterness,” a Chinese expression that means to endure hardship.”

Part of the issue is that industries that used to attract many thousands of Chinese graduates – such as online education, technology, and real estate – have been weakened over the past couple of years by a series of Chinese government crackdowns. The impact of the crackdowns is well illustrated by the example of the once-thriving private tutoring company New Oriental, which in 2022 lost 80% of operating revenues and 90% of its market value. Reeling from the losses, it was forced to fire 60,000 workers, many of whom would have been university graduates.

Aware of the danger of growing discontent among young Chinese, the government has taken to pressuring schools and career counsellors across the country to connect graduates with employers. The pressure, compounded by employers’ resistance and a lack of jobs in desirable white-collar industries, is so intense that some schools and counsellors – to pad their performance metrics – are urging students to accept fake job offers. Said one student to the Times, “If you don’t sign one, they will hassle you more and more frequently … the closer it gets to graduation, the harder they press.”

The related trend of yanbi

University World News reports that poor career prospects for graduates, as well as China’s notoriously competitive postgraduate entrance exams, are increasing the trend of yanbi – the Chinese term for postponing graduation. This term used to mostly describe students who deferred graduation because they had fallen behind in classes, but it now includes students who remain on campus to avoid competing for jobs and paying more for accommodation and other living costs. Living costs are often lower on campus than outside of it.

Where in the past universities were eager to graduate students to make room for the next cohort, they are increasingly likely to support yanbi applications. University World News explains:

“Official media has reported that universities are just as keen to keep final year students enrolled in order to improve their official graduate employment record, given that these students would not show up as unemployed.”

Faced with a high youth unemployment rate, slower than expected post-pandemic economic recovery, tough entrance examinations, and rising costs of living, it’s not difficult to see why Chinese youth are becoming disillusioned about their career prospects.

The “lying flat” trend is so extreme in some cases that students are preferring to be paid by their families to stay home and do chores than to seek a formal job. Speaking to CNN, Litsky Li said:

“The reason why I am at home is because I can’t bear the pressure of going to school or work. I don’t want to compete intensely with my peers. So I choose to ‘lie flat’ completely.”

There is even a term for young people who choose options like Ms Li: “full-time sons and daughters.” The new title was popularised on the Chinese social media site Douban in late 2022.

Demand for study abroad appears to be rising

For several years, Western educators have been struggling with a more unpredictable flow of students from China. Of the leading English-speaking destinations, only the UK managed to keep Chinese enrolments climbing in 2021/22.

A major reason for slowing Chinese outbound has been the increased capacity and quality of the Chinese education system. The number of Chinese universities in Top 100 world university rankings such as QS, THE, and Shanghai has surged over the past five years. Another factor contributing to a weaker outbound flow of Chinese students has been China’s massive economic growth and growing geo-political power over the past decade.

But pandemic-related economic contraction, as well as the Chinese government’s scrutiny of and clampdown on certain industries, has reduced the allure of staying in China for higher education. As we reported recently, Chinese students are flocking to Asian destinations to avoid the intense competition of domestic entrance exams and to enrol in relatively affordable programmes.

There are indications that Chinese demand for Western education is on the rise as well. As per an article in the China Daily:

“The number of Chinese students studying abroad this year is likely to reach or even exceed the level before COVID-19 hit in 2019, with a strong recovery already seen in the sector after travel restrictions were lifted, according to several overseas education consultancies.”

Wang Ting, deputy general manager of EIC Education Beijing Branch, says that Chinese applications for Australia and New Zealand grew by 129% year-on-year in Q1, 2023, and that applications also rose for Canada (95%) and the UK (44%).

Liu Wei, vice-president of New Channel International Education Group, reported a 45% increase in inquiries in Q1, 2023 over Q1, 2022. He attributed the trend to “tough competition in getting into good schools and finding decent jobs in China.”

Skills gaps could influence programme preference

A British Council report published this month, Preparing students for the jobs of the future in East Asia, notes that China currently suffers from a deficit of nearly 30 million skilled workers. This deficit is remarkable given the high youth unemployment rate, and it suggests a mismatch between the qualifications students are obtaining from Chinese universities and the available jobs in the Chinese economy. After analysing Q4, 2022 data, the British Council identifies these sectors in China as the ones needing the most skilled workers:

  • High-tech industries such as integrated circuits, IT and computer software;
  • Industries facing dynamic talent gaps such as intermediary, catering, logistics and insurance;
  • Industries with fast-growing business needs such as professional services, consulting, entertainment and sports.

Study abroad programmes linked to those industries could be especially popular in China this year, especially for Chinese students intending to return to their country after graduation.

Given Chinese students’ new apprehension about finding a job in their country, however, it’s also possible that a growing number of students will be interested in working abroad after graduating. For those students, attractive post-study work opportunities could become a more important factor than in the past in their study abroad decision-making.

For additional background, please see:

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