The year 2013 has seen the largest number of college graduates since 1949. With 6.99 million new graduates, there were 190,000 more that last year. However, the rate of employment for these graduates is less than 30 percent. In fact, a large number of small and medium sized enterprises (SMEs) need college students, but many students do not want to work at SMEs.
Zhang Weiying, a prominent Chinese economist and head of the Guanghua School of Management at Beijing University, attributed the mismatch in the Chinese job market to the ingrained notion that only a job at a state-owned enterprise (SOE) is secure; it is called the "iron rice bowl," whereas a job with a private enterprise is only good for a temporary situation. Zhang believed that the government has set up a large number of SOEs; they receive more resources and better treatment than private enterprises. If SOEs did not have such an identity, employment opportunities would be relatively fair and students would not have to pick and choose.
A media survey found that many students use personal connections to hunt for jobs at SOEs. Many employers’ hiring decisions are based upon the applicant’s connections rather than their capabilities. The students who get into SOEs through personal connections create a new form of nepotism. Beijing News conducted a recent survey which showed that about 21.5 percent of those surveyed admitted this regarding the question, "Have you used personal connections when looking for a job?"
Source: Beijing News, carried by Caijing magazine, May 30, 2013