© Reuters. Zhang Baichuan, 23, checks a job advertisement at a job fair in Shijiazhuang, Hebei province, China February 24, 2024. REUTERS/Florence Lo
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By Ellen Zhang, Xiaoyu Yin and Marius Zaharia
BEIJING/HONG KONG (Reuters) – Chinese university graduate Zhang Baichuan travels hundreds of kilometres from one job fair to another in a final push to find a better offer than the unappealing one he received after more than 1,000 applications.
He hopes the post-Lunar New Year recruiting season in China, when many companies advertise for new positions, brings more attractive opportunities than the livestream moderator role he was offered recently.
While Zhang, 23, was fine with the 5,000 yuan ($695) monthly salary, with the company covering meals and accommodation, he dreaded the 12-hour shifts, six days a week – known in China as the “996” work culture.
“I’m not keen on a 996 schedule, but I’m considering it as a safety net while I look for better options,” Zhang, who holds a business management degree from Hebei GEO University, said outside his 50-yuan-per-night hostel room in suburban Beijing.
“I don’t like the devaluation of degrees, but the reality is that there are more college graduates now,” he said before travelling to another job fair outside of Beijing.
Encouragingly for China’s first-quarter economic growth, the post-Lunar New Year recruiting season is off to a stronger start than in 2023, when the world’s second-largest economy was going through its biggest COVID-19 infection wave.
But high youth unemployment gives employers a large pool of candidates to choose from, keeping wage growth sluggish and cementing worries China may struggle to boost household consumption enough to stabilise growth and lift the economy out of deflation.
Zhaopin, one of China’s biggest recruiting platforms, said in the first week after the Feb. 10-17 break there were 45% more companies looking to hire than in the corresponding post-holiday week of last year.
That demand hasn’t translated into higher wages, however, which were only up 3% on average.
The pace, which lags China’s expected 2024 economic growth target of around 5%, suggests the job market remains an employers’ market for now, said ING chief China economist Lynn Song.
“The recovery in the job market will likely be modest this year as economic momentum remains relatively weak,” Song said.
More than 21% of Chinese aged 16-24 were unemployed last June, the last data point before officials suspended the series. China resumed publication this year, excluding college students from the data, to put youth unemployment at 14.9% in December.
‘NEW NORM’
The travel sector – the fastest to recover after three years of COVID restrictions – led the way in hiring, offering 56.3% more jobs than last year, followed by logistics with 26% and transportation with 21.6%, Zhaopin said.
At the Beijing job fair, one of thousands across China, a hotel human resources manager who only gave her surname Han, said her firm tweaked commission thresholds, which could lead to 30-40% higher take-home pay from last year.
Others were less generous. Zhang Chengjin, director at housing information provider Mingwang, said he could only offer a “slight increase,” given the troubled property sector was generally cutting jobs.
A civil servant from Lanzhou, capital of the northwestern Gansu province, said the local government’s debt woes forced it to cut bonus payments, reducing his annual pay by a fifth.
“It might be the new norm,” he said.
SUBSIDY HOPES
With China’s parliament starting its annual meeting next week, pressure is growing on leaders to come up with policies that address weak household spending, a long-standing structural imbalance.
Analysts at Societe Generale (OTC:) and HSBC say last week’s comments by President Xi Jinping calling for the “replacement of old durable goods” raised expectations policymakers could announce subsidies for home appliance purchases.
But such subsidies would change little. Relative to economic output, household spending in China is about 20 percentage points below global average.
For China to become a more consumption-driven economy, household incomes must rise faster than GDP for sustained periods and policymakers need to find ways to transfer resources from the government sector to households, analysts say.
“Large enough subsidies and tax breaks are helpful in frontloading purchases,” said Gary Ng, Asia Pacific senior economist at Natixis. “However, consumption will only rebound if households become more optimistic or if income growth and wealth effects see real improvement.”
Gao Tianyi, a 26-year-old attending the Beijing job fair, worries about a “trend of pushing salary expectations lower,” but says he tries to “remain humble” in his job hunting.
“Some people can’t sleep at night because they can’t find a job,” said Gao. “For me, it’s the mornings. I wake up and immediately start to worry.”
($1 = 7.1989 )
