WUHAN, China — The two-story employment complex here, like job centers across China, is crowded with educated young people who are trying to figure out their futures in a country where the job market still prizes assembly-line workers willing to labor monotonous hours on backless stools.
Among them is Zheng Yilong, who graduated from a university three months ago and refuses to consider a factory job even though his degree is in machinery design. He seeks a desk job instead. Sitting at the employers’ booths are much older factory managers like Jin Tao who despair of finding the workers they need.
“I see the problem mostly as an education mismatch problem,” Mr. Jin said. “I’m willing to pay more than 3,000 renminbi a month, which is more than what fresh college graduates are getting.” (That’s about $500.) “I’m also willing to give training, but the young people now with college degrees just don’t want to work in factories.”
Addressing the mismatch in skills and expectations here and across China is a central issue facing the country’s leaders as they gather on Saturday in Beijing. They will be convening for a four-day meeting, the Third Plenum, that is expected to set the tone for Chinese economic and political policy making for the next five years.
They will discuss whether to cut consumption taxes, deregulate banking and currency markets, and break up state-owned monopolies that have slowed growth in high-end sectors like telecommunications. The common theme of all the policies: how to create a consumer-led economy and arrest a steep increase in unemployment among young, educated Chinese.
China has relied for the past three decades on unrelenting, even manic, construction of ever more factories, bridges, roads and apartment towers. But that is producing chronic overcapacity together with an acute shortage of blue-collar labor.
In a speech to trade union officials published on Monday, Prime Minister Li Keqiang said securing enough jobs for citizens was his government’s top economic priority.
“Employment is the biggest thing for well-being,” Mr. Li said. “The government must not slacken on this for one moment, and we must constantly focus on this point. For us, stable growth is mainly for the sake of maintaining employment.”
Similar plenums in 2003 and 2008 produced calls for a shift to a more sustainable economy based on more consumption, more high-end services like finance and more high-tech jobs. The meetings carry their name because they are the third gatherings of the Communist leadership in each five-year term of the party’s Central Committee; the first two plenums mainly involve personnel changes.
Actual changes in economic policy have been slow despite vows of reform. A big impediment to creating a consumer economy are the low incomes of a generation of China’s young people, the country’s would-be consumers.
Born in an era of ever-rising prosperity and mostly only children because of the government’s “one child” policy, young people across China consistently say in interviews that they tend not to share their parents’ compulsion for saving for retirement and children’s educations. Even so, they seldom have the incomes to consume on the scale of the young Americans and Europeans whom they admire and envy.
Mr. Zheng spends almost as much on new clothes each month as he does on food or rent, he says. But as is common for a generation facing high jobless rates — 25 percent or more for recent college graduates — he relies on family and savings to pay for his lifestyle while looking for the right job. That puts a limit on his overall spending. “I want a job for which I was trained, or else my education will be wasted. I don’t want to work in a factory,” he said.
Complicating matters is that many young people are avoiding lower-end service jobs as well as factory jobs. The high school graduation rate in China is rapidly approaching three-quarters of young people, similar to the United States. The number of university graduates in China has nearly quintupled since 2000.
Cultural norms frequently discourage high school and college graduates from accepting jobs in factories or even restaurants. For many young people, the most prized job is a position in a government or Communist Party bureaucracy, which is seen as providing security, healthy wages and benefits — and the perks that come with exercising power, such as special investment opportunities ahead of initial public offerings and sometimes outright corruption.
Zhong Hui, a 23-year-old manager in a hot pot restaurant chain, said that he was struggling to find waiters and dishwashers despite offering $300 to $400 a month plus lodging in air-conditioned dormitories.
“It is not easy to find workers as people believe in their hearts that being in the service industry and serving other people is shameful. Parents do not want their children to work in services either,” Mr. Zhong said.
Wuhan is an industrial hub of nearly 10 million people near the center of the country. The century-old, 700-mile rail line from Wuhan to Beijing was the country’s first and it became a spine of economic development, although it was eclipsed a year ago by a parallel, high-speed line on which bullet trains now hurtle at 185 miles an hour.
What keeps the Wuhan economy ticking is increasing investment. Drive across the city in the middle of the night and what is striking is that at least half the many construction sites are floodlit, huge cranes still moving as workers labor around the clock to build more apartment towers, roads and other projects.
Powering that investment is an unending flow of cheap loans from state-owned banks. China’s central bank has opened the spigots of monetary stimulus each time the economy has started to slow sharply in the past five years. Like cities across China, Wuhan has borrowed heavily to finance local growth as have the companies here.
To be sure, young Chinese who are able to find well-paid jobs are starting to spend money. Zeng Danni, a 25-year-old gynecologist with long hair and fashionable clothes, prowled a Ford dealership here on a recent afternoon with a friend and her friend’s husband, looking for a sporty car to buy in a shade of blue that she regards as pretty and youthful.
“I am not taking out any loans for this purchase since the interest rates are too high. I am buying from our savings,” she said, adding that, “My husband works in building safety design and we don’t have any kids yet.”
Young Chinese may still be more fortunate than many young people in the West, in that at least factory and restaurant jobs are available. But without broader policy changes, economists question how the Chinese economy will produce enough desirable jobs to bring down youth unemployment, particularly among college graduates, a group that has been among the most politically volatile in China.
“If you want just any job, you can get one, 100 percent for sure — as long as you are not picky,” Mr. Zheng said. “I think there is a mismatch between the jobs that are available and what I am looking for.”
Source: http://www.nytimes.com/2013/11/06/business/international/chinas-leaders-confront-economic-fissures.html?n=Top/Reference/Times%20Topics/People/B/Bradsher,%20Keith?ref=keithbradsher&pagewanted=print