China could very possibly be setting a record this year with the largest number of unemployed recent college graduates in the history of the world. A recent article in International Higher Education reports that in 2009 "close to 2 million graduates may not find jobs." The article goes on: "in a job fair held by Donghua University, more than 30,000 graduates competed for 1,700 positions provided by foreign firms." In 1999 the Chinese government embarked on an ambitious expansion of its higher education system - just in time for a huge number of students to graduate into the current depressed job market.
How to deal with the problem? Double down on higher education. The Ministry of Education is expanding postgraduate opportunities in the hopes of absorbing the glut of recent graduates. While this will help in the short run, this only sets the Chinese labor market up for further problems. Since education in China is still very much a state-run affair, there are large mismatches between supply and demand in the labor market - too many accounting and language degrees, too few technical specialists. Opening up the higher education sector to private competition might be just what is needed to prevent the next glut of unemployed graduates.
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