Young Chinese seek civil service jobs amid economic headwinds

Record numbers of educated young Chinese are flocking to government jobs in search of security, as the world’s second-largest economy faces headwinds narrowing private sector job prospects.

As many as 3.7 million applicants across the country, including graduates of the nation’s top universities, took the annual civil service exam last month. However, only about one in 100 people are expected to secure a place in the government’s 38,100 entry-level roles starting next year.

Many were willing to accept this possibility, even as the economic downturn and deteriorating business confidence dimmed the outlook for private sector employment. The unemployment rate for urban residents aged 16 to 24 in China has been above 17% since July, compared to about 10% in the United States.

Government jobs were once considered “iron bowls” due to their stability and fixed working hours. But as China’s economy opened up, the country’s educated youth sought higher wages and more job opportunities in the private sector, competing to join homegrown technology giants such as Alibaba, Tencent and Huawei.

These “iron bowls” are now making a comeback as the prolonged economic recession and the Chinese government’s tightening of regulations on parts of the economy, including real estate, technology and tutoring companies, have led to massive layoffs in the private sector. China’s top 500 private companies cut 314,600 employees last year, according to the industry and commerce association.

With roles and expectations mismatched, job seekers are lowering their ambitions and seeking government jobs.

Take Coral Yang, 22, for example. She spent four months job hunting before securing a job at a local marketing agency, only to have the offer rescinded a few weeks later when the company eliminated the position as part of its cost-cutting efforts.

“There aren’t that many job openings. It’s very disappointing to miss out on a job offer after months of searching,” Yang said. “But this just shows how unstable the private sector has become.” Yang graduated from a top university in Shanghai with a major in data analysis and is currently preparing to take the civil service exam next year.

she is not alone. According to a study conducted by recruitment platform Zhilian Zhaopin, the proportion of students who listed jobs in the public sector, including government agencies and state-owned enterprises, as their top career list increased last year, rising from 42% in 2020 to around 63% in 2024.

Wei Xiang, a senior research fellow at the Institute of East Asian Studies at the National University of Singapore, said that among public sector jobs, students are more likely to work for state-owned enterprises, which have more staff than government agencies, making them a safer option given the low pass rates for government exams.

According to the survey, the number of graduates seeking employment in private companies is decreasing, dropping from 25.1% in 2020 to 12.5% ​​last year.

Min-Jiang Lee, associate professor at Singapore’s S. Rajaratnam School of International Studies, said increased job market uncertainty, job cuts and slowing private sector wage growth are leading many young people to seek “the security, predictable benefits and social prestige of public services”.

China’s Ministry of Education aims to increase employment in private enterprises by offering tax refunds, social insurance reductions and subsidies to encourage the employment of young graduates. However, incentives were low. For example, the Shanghai municipal government provides a one-time subsidy of only 1,500 yuan per new hire.

Applications to the public sector have soared, but job openings have barely kept up as local governments struggle to expand their workforce and civil servant jobs are harder to come by.

Natixis senior economist Jiangwei Xu said that many local governments are “constrained by funds and reluctant to hire more staff” due to fiscal constraints caused by the real estate recession. “After a period of expansion, government employment is now flat,” he said, adding that competition is intensifying.

The number of new government jobs rose 66% year-on-year in 2020, as demand for civil servants increased to implement pandemic-induced lockdowns and related initiatives. However, the central government has reduced the number of employees by 4% to 38,119 by 2026.

As a result, competition will become increasingly fierce, with around one in 100 candidates being hired next year, compared to one in 70 in 2023. The application rate for specific positions in regions where there is already a shortage of jobs was an astonishing 1 out of 6,470 applicants.

“The competition rate in some provinces is now comparable to the world’s most selective universities, and it is quietly becoming one of the most competitive national sporting events in China,” said Han Sheng Lin, a professor at New York University in Shanghai.

Competition is likely to become even more intense next year as a record number of university and vocational school graduates (approximately 12.7 million) enter the job market.

As part of its efforts to absorb more jobs, the Chinese government further expanded the pool of candidates by raising the age limit by three years to 38 for those with a graduate degree and 43 for those with a Ph.D.

But still, “a significant portion of job openings are reserved for new hires,” said Shan, who estimated that about 70% of new hires this year were recent graduates, up from less than 40% in 2019.

Experts say the surge in demand for civil service jobs is also the result of young people becoming increasingly disillusioned, losing faith in private companies and placing more emphasis on work-life balance.

“More and more people are attracted to so-called ‘lying down’ in the government system,” Shan said, referring to the Internet catchphrase about people dropping out of the rat race and living on the bare minimum. “Of course, whether it’s really what people imagine is another question.”

Neil Thomas, a fellow at the Center for China Analysis at the Asian Social Policy Institute, said many who succeed in government jobs feel stifled by the rigid bureaucracy, are slow to rise through the ranks, and can become more political the higher they climb.

“This is not unique to China, but it is becoming more and more pronounced,” he added.

On the other hand, the number of students who are betting on graduate school research is decreasing. The number of people taking the National Graduate School Entrance Examination in October fell to 3.4 million from a peak of 4.74 million in 2023, the Education Ministry said, reflecting declining confidence in advanced degrees that improve job prospects.

“The benefits of graduate degrees seem to be decreasing…The imbalance is leading to a decline in the relative value of the degrees themselves,” Xu said, adding that many students no longer consider two or three years of extra study to be a guaranteed path to a better job.

Zhilian Zhaopin’s research found similar findings. Employment prospects for vocational school graduates are good, with the employment rate rising to 56.6% last year. Meanwhile, opportunities for graduate students have worsened, with the job offer rate dropping from nearly 57% in 2023 to less than 45%.

Economists have warned that a growing proportion of top university graduates concentrating on the public sector rather than pursuing entrepreneurial or riskier private-sector paths could weigh on long-term economic growth.

“Over time, this trend could reshape China’s talent landscape by strengthening the human capital base of state bureaucracies while reducing the dynamism of innovation in the private economy,” RSIS’s Li said.