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Middle class dream fades for China white collar workers
15 December 2010

SHANGHAI, Dec 15 (Reuters) - Shanghai native Wu Xiaodong has a solid job as a human resource supervisor in a technology company and earns around 4000 yuan ($600) a month. But he is still single at 28 and lives with his parents.

"At this age, things we would be looking at would be marriage and children," he said, adding that he is daunted by the costs of an apartment, a wedding, education for his future children and the price of medical care as his parents age.

A university degree has long been seen as a ticket away from poverty, but China's version of the "middle class dream" is fast fading as graduate job seekers are faced with the stark reality of high living costs, low wages and dim career prospects.

The competition for white collar jobs is heating up as companies in China's top-tier cities such as Shanghai look for talent among an ever-widening pool of more than 6 million graduate job seekers every year.

University education has been a key to China's aim to create a broad urban tier of middle class families with "well-off characteristics" nationwide. The country began expanding university enrollment in 1996 to meet growing personnel demands as China's economy boomed, leading to a surge of graduates.

But signs of economic trouble have put additional financial pressure on companies already struggling with the after effects of the global financial crisis, keeping wages tight.

China's inflation soared past forecasts to a 28-month high in November and showed signs of spreading beyond food prices, putting pressure on the government to tighten monetary policy.

A recent study by a top Chinese labour economist showed that China's university graduates on average earned only 300 yuan ($44) more than a blue collar migrant worker per month, setting off hot debate on the worth of a university education.

"During my father's generation, university education produced the elite," said 24-year-old Zhu Feng, a post-graduate student at a Shanghai job fair.

"But today, university graduates are everywhere, and there are also many people with masters and doctorates. So the worth of a degree is very much devalued."

As a result, thousands of university graduates crowd job fairs in Shanghai at every opportunity, hoping to find a starting point for their white collar career.

Job seekers do quick face-to-face interviews with recruiters before dropping off a resumes from a thick stack.

CITY LIGHTS

Since Chinese cities began booming in the 1990s and the workforce began to favour degree-holders over traditional state-run factory workers, people from poorer parts of China have migrated into cities for an education and then a job.

Top-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen are now the favoured destinations for graduates.

But reality is biting hard into these dreams as the increasingly high cost of living in these big cities set in.

Rising property prices have been one of the key factors affecting the Chinese middle class, pushing away the chance of owning a home for many young couples.

With China's property sector crucial for the broader economy, authorities have been at pains to balance the needs of economic stability with those of ordinary citizens.

The growing ranks of white collar job seekers is posing a policy challenge for Beijing's Communist Party leaders and some experts have suggest the authorities should divert young professionals into second-tier cities such as Chengdu and Xiamen to take pressure off Beijing and Shanghai.

Cost pressures are a huge concern for out-of-town graduates, who live on the edge of poverty in China's biggest cities.

Known as the "ant tribe", a rising number of these struggling graduates are living in cheap and basic housing in the suburbs and travelling on crowded public transportation for more than an hour to reach their workplaces in the city centre.

22-year-old Li Hanli, a native of central Hunan province, shares a room with two other people at a dorm-like hotel in the city's suburbs.

Her clothes hang from the ceiling of her small windowless room, and internet and power cables line the floor in disarray.

Li has just started work at an internet software company as a sales executive earning 1500 yuan ($225) a month. She and others like her can only afford places like hers, which charge around 500 yuan ($75) a month.

Despite the difficulties, she is undaunted.

"With such a big market, it would definitely bring me more opportunities to develop myself. I also have my own dreams for my career. I believe I can reach the peak of my career in Shanghai."
 

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This is normal. It happen everywhere in developing countries.

No wonder my teachers in Taiwan said we all university graduates, even taxi drivers in Taipei. If you want to success, you can't depend on diplomat or skills you learn in school, but you need specialty, uniqueness or.......even connection.

What my teacher said is quite right. Well, I can't say too much, since I'm still economically struggling too.........
 

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The growing ranks of white collar job seekers is posing a policy challenge for Beijing's Communist Party leaders and some experts have suggest the authorities should divert young professionals into second-tier cities such as Chengdu and Xiamen to take pressure off Beijing and Shanghai.
No kidding, hopefully those new CBDs in second-tier and capital cities can complete fast so companies can move in and start hiring! Beijing, Shanghai, and now Guangzhou and Shenzhen have way too much pressure.
 

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^^ The employment situation for university graduates is no better in Canada and the US.

Is higher education a scam?

December 20th, 2010

By Carson Jerema


Forget 'investment,' a better way to describe a degree might be 'gamble'

Is higher education a scam? If the goal is for graduates to become gainfully employed and contribute to economic productivity, then it just might be. Writing for the Chronicle of Higher Education’s “Innovations” blog, Ohio University economist, Richard Vedder, mines through American employment data for college graduates available from the Bureau of Labor Statistics (BLS), for a post titled “The Great College Degree Scam.”

What he found was that “approximately 60 percent of the increase in the number of college graduates from 1992 to 2008 worked in jobs that the BLS considers relatively low skilled—occupations where many participants have only high school diplomas and often even less.”


To put it another way, between 1992 and 2008, there were roughly 20 million employed graduates added to the American workforce, but only 8 million of that increase were employed in college level jobs, while 12 million, or 60 per cent of the increase, were working in low skilled occupations.

So, while in 2008, 65 per cent of total, or 49.35 million, employed graduates were working in college level jobs, Vedder’s analysis demonstrates that the chances of landing such a job with a college education has been steadily declining over time. In 1992, roughly 82 per cent of the 28.9 million employed college graduates were working in college level jobs.

To illustrate what is considered a low skilled job, Vedder uses waiters and cashiers as examples.

In 1992 119,000 waiters and waitresses were college degree holders. By 2008, this number had more than doubled to 318,000. While the total number of waiters and waitresses grew by about 1 million during this period, 20% of all new jobs in this occupation were filled by college graduates. Take cashiers as well. While 132,000 cashiers possessed college degrees in 1992, by 2008, 365,000 cashiers were college graduates. As with waiters and waitresses, 20% of new cashiers since 1992 are college graduates.

Of course, people can pursue an education for reasons other than employment or economic gain, but that is not how education is marketed either in the United States or in Canada, and creeping credentialism has long been flagged as a problem on both sides of the border.

The obvious beneficiaries of ever increasing enrolment in college and universities are, of course, the institutions themselves, who gain tuition and funding for each student they admit, but also businesses who can use the holding of a degree as a signal device without having to invest resources into properly vetting job candidates. And, as Vedder notes, the trend points to growing inefficiencies in the education system. Whereas not that long ago, it took the system 12 or 13 years to prepare most people for adulthood, it now takes 17 or 18 years.

Not exactly the type of information to find its way into university recruitment pamphlets, is it? Students and parents might fairly ask: at what point is pursuing a degree no longer an “investment” but a “gamble”?

UPDATE: A more complete study based on Vedder’s research was released Thursday.

FROM WALL STREET TO WAL-MART:
WHY COLLEGE GRADUATES ARE NOT GETTING GOOD JOBS


http://www.centerforcollegeaffordability.org/uploads/From_Wall_Street_to_Wal-Mart.pdf
http://oncampus.macleans.ca/education/2010/12/20/is-higher-education-a-scam/comment-page-1/#comment-23643
 

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In my opinion, China probably has very bad environment for univ. graduates. Since most of the business are depend on low-income labor intensive works. There are also no intellectual property respect. China university quality is also very very bad.

In my opinion, China government need to think and make a plan to create an good environment by integrating education and business. So every univ. graduate ready to face the real world and business can maximize every univ. graduate potential in the competitive world. There are some kind of connection and cooperation between business and education system. What business needs, we cultivate it in our education system. We also need to think far beyond in the future, and preparing our children to face the future.

We create a high skilled graduate with ambition and visionary thinking....and good environment for them to life and grow after post-university.
 

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^^ China's education system isn't bad at all, as this article indicates.

Japanese firms hire China's brightest.

2010/11/25
Asahi.com

For Yukimasa Uchida, managing director of the Japanese arm of the Boston Consulting Group, a recent recruiting trip to sift the best and the brightest among China's top graduates was a revelation.

"It was like striking a gold mine," Uchida said of the job fair.

His company had attended the event expecting to make job offers to two or three students, but only if it could find people of the right quality.

"We have already made job offers to six students in Beijing and Shanghai together," he said. "We may hire some more."

He was not alone among Japanese recruiters in being impressed by the quality of applicants at the event, held in Beijing and Shanghai between Nov. 3-6.

The fair, organized by Recruit Co., a leading job placement agency in Japan, drew about 10,000 students from 39 universities, including the elite Peking and Tsinghua universities in the capital and Fudan University in Shanghai. Of these students, only about 1,000 college seniors were selected for interviews by the prospective Japanese employers, after a vocational aptitude test and preliminary interviews.

For successful applicants, the potential rewards on offer were mouthwatering. Although Japanese businesses have been hiring in China for years, the 22 companies at the fair were hiring people to career-track positions in their Japanese headquarters, rather than jobs at China-based affiliate companies.

That usually means much higher pay and chances for promotion. The companies included major names such as Sumitomo Mitsui Banking Corp., Mizuho Financial Group Inc., Kirin Brewery Co. and Konica Minolta Holdings Inc.

Like Uchida, Noriya Fukumoto, personnel manager of the toymaker Tomy Co., was bowled over by the caliber of the students he encountered.

"They are brilliant," Fukumoto said. "They have a clear vision of their career path and have a strong drive, compared with Japanese students."

Tomy offered jobs to three applicants, one more than it had anticipated. It plans to recruit foreigners to half of its new positions for college graduates in future.

Boston Consulting Group had been hiring between 10 and 20 graduates a year from Japanese colleges, including graduates of the University of Tokyo, Keio University and other big-name schools.

"Most job applicants were inclined to value stability," Uchida said. "There were fewer combative candidates, like soldiers of fortune."

In China, its recruiters were finding ambitious and go-getting personalities, he said, "the type we greatly favor."

The company did not make Japanese language skills a requirement for the recruits at the interview, taking the view that they can learn Japanese after getting a job offer. They all spoke English competently, although most of them had never been abroad.

Junichi Ito, the organizer of the fair at Recruit's Shanghai unit, said the large number of top-quality applicants had been attracted because Japanese businesses were offering positions on the payrolls of their Japan-based operations.

"Japanese affiliates in China have found it hard to secure top-class personnel because their pay is lower than that of U.S. and European counterparts," Ito said. Another obstacle has been a perception that local hires cannot reach the top echelons of corporate hierarchies.

The companies at the fair paid 1 million yen ($12,000) each to take part and were required to pay 1.1 million yen for each new recruit. In return, they got access to the cream of the more than 6 million people who graduate from Chinese colleges each year.

A 22-year-old senior who majors in Japanese at Fudan University said getting on the payroll of a Japanese company's head office was key.

"While a monthly salary at a Japanese affiliate in China is about 3,000 yuan (about 37,000 yen), the starting salary in Japan is about 200,000 yen. There is no comparison," she said.

The promise of working overseas and of greater responsibilities at head office made the positions on offer at the fair very attractive, she said. "Many of my classmates are going to work in the United States and Britain," she said. "I want to work abroad, too."

Xu Shuang, 21, a Japanese major at Tongji University in Shanghai who is studying international economy at Fudan University on weekends, said he had been interviewed by a Japanese bank. The enthusiasm of the Japanese for hiring foreigners was evident, he said. "Japan's corporate culture will be changing."

The targeting of Chinese talent by Japanese businesses is not limited to the graduate market. China's state-run Shanghai Foreign Service Co. and the Japan-based companies A-commerce Inc. and Global Power Co. formed a tie-up in October to target mid-career Chinese personnel.

They plan to hold a presentation for about 50 Japanese companies in Shanghai by the end of the year and have 500 Japanese organizations signed up within three years. Their service will include introducing Chinese personnel in white-collar jobs at foreign-affiliated companies in China to Japanese companies' main offices in Japan.

Yoshikazu Akiba of A-commerce said Chinese workers, who used to prefer working for U.S. and European companies, were showing more caution since the collapse of Lehman Brothers in autumn 2008.

"A Japanese company that emphasizes job security is greatly appreciated," Akiba said.

Meanwhile, Japanese companies wanting to expand their operations in China are viewing Chinese personnel as critical to the success of their marketing strategies.

"Sales pitches by Japanese staff in China have their limits," an official with a major food company said. "We would like talented Chinese personnel to acquire our corporate culture while working at our main office and then to take the charge of developing new markets in China."

One alleged drawback of hiring Chinese graduates is their penchant for switching jobs, but Uchida at Boston Consulting Group said this was not an issue.

"Many Japanese elite graduates who are not very ambitious types quit in two or three years," he said. "Whether or not Chinese staff stay on depends on their employer."

With the ratio of Japanese college seniors securing job offers hitting a record low 57.6 percent this year, the once remote prospect of competing with foreigners for prized positions at Japanese head offices is now a reality. Fukumoto at Tomy put it baldly: "If we employ more Chinese, that means we have fewer slots for Japanese."

For Uchida, that might not be a bad thing: 'If (recruitment of more foreign personnel) wakes Japanese students and employees to global competition, it would be a success," he said.


(This article was written by Atsushi Okudera and Tokuhiko Saito.)
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http://www.asahi.com/english/TKY201011240244.html
 

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^^That's an eye opener article. Quite different from what I read in internet (I became a victim of the media, haha......). Haoting, you always have a good article.

So, what US called as "sputnik moment" actually wasn't a joke. This is real. I hope what China invest in education today will bring big benefit and we will see the effect 5-10 years later.
 

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Here's more interesting reading on this topic. :)

Japanese businesses lose out in hiring of top Chinese talent

2010/12/28
Asahi.com


In the old days, when the Japanese management style helped to push Japan to the top of the economic stratosphere, Japanese corporations often laughed at the inefficient operations of their Chinese counterparts.

But now, as fast-growing China is set to overtake Japan as the world's second-largest economy, Japanese companies find themselves near the bottom of the pecking order in terms of hiring in China.

The most talented Chinese are flocking to Chinese, U.S. and European companies that offer higher wages and better chances for promotion than Japanese companies. Other skilled workers are fleeing their Japanese employers for more promising futures at Chinese firms.

And even Japanese workers, who could be regarded as the new "cheap labor" in China, are turning to foreign companies.

A job offer posted on a website for MBA graduates from a prestigious Chinese university underscores how rising salaries in China are luring elite workers.

It said: "Offer from a head-hunting firm. Post of deputy manager, sales headquarters, at a major sports gear company. Experience at a foreign firm in the same business required. Annual pay 1.5 million yuan (19.5 million yen, or $230,000)."

"It's adequate because the rivals are such popular makers as Nike of the United States or Adidas of Germany," said a member of the group. "No one would take the post for 1 million yuan."

Until five years ago, 1 million yuan could hire someone as CEO, said pioneer head-hunter Louisa Wong, founder of Bo Le Associates Ltd., a Hong Kong-based executive search company specializing in Chinese.

One million yuan can now hire only up to a business manager, she said.

Foreign companies used to come to China for cheap labor, but they now need market-knowledgeable people who understand regional differences, can liaise with government officials and lead sales strategy in the country.

According to Wong, the annual salary for a CEO is 2 million to 3 million yuan--a level beyond what ordinary Japanese companies can pay to people in charge of their Chinese operations.

Wong said multinational companies want a "superman" who can handle any task related to developing the Chinese market.

She said her business remained brisk even during the financial crisis that started in fall 2008.

Pierre Zhuang, chief of Bo Le's Shanghai operations, worked for the Chinese arm of Suntory Ltd. when he was recruited by Wong to the nascent head-hunting industry.

The market in China grew tenfold in the past 10 years to 20 billion yuan. Zhuang foresees another tenfold increase in the coming decade.

Bo Le has further expanded its business this year by concluding a deal with Japan's Recruit Co., which obtained a 14.3-percent stake in the company.

Dai Huaizong, chief at the Chinese arm of French electronics and cookware maker Groupe SEB, used to work for another European company. He earns nearly 4 million yuan a year, according to a company that head-hunted Dai.

Yao Mumu, 32, who left a foreign accounting firm in Beijing for the post of deputy financial director at a Chinese infrastructure firm, said phone calls from head-hunters are almost an daily occurrence.

A qualified accountant, Yao earns 400,000 yuan a year, far higher than the income for ordinary Chinese business people.

But she says: "The chances are 90 percent that I will switch jobs in five years. My annual income will perhaps be 1 million yuan then."

However, most Chinese aren't automatically offered huge salaries; they have to work at it to reach that level.

The average monthly wage of workers is 3,700 yuan, even in Beijing, where payments are relatively high. And in a tight job market, new college graduates' initial monthly salary is 3,000 yuan on average.


Changing jobs is one common way to increase one's fortunes, according to Zhu Xiaodong, who runs a marketing company in Beijing.

While an employee could expect to earn only up to 10,000 yuan a month after working many years, "the wage will jump to about 50,000 yuan if you switch jobs after getting new qualifications or building careers," he said.

An MBA degree is one of those qualifications deemed a "ticket to high-paying jobs."

About 78,000 people applied to MBA courses in China in 2010, twice as many as three years earlier.


Gao Xudong, director of the prestigious MBA program at Tsinghua University, said a major change has occurred among the course's graduates in the past five years.

"Most obtained jobs in foreign-affiliates before, but now a majority of our students are aiming for places in domestic companies," Gao said.

China's state-owned enterprises were once infamous for their inefficient management. But they are now regarded as the engine for the nation's growth, and they attract MBA holders by offering favorable benefits packages.


One female student in Tsinghua's MBA program worked for Mitsui & Co.'s local operations and then for Toyota Motor Corp.'s joint venture in China.

The 29-year-old says Toyota's inhouse training program was superb, but she found the daily overtime work unbearable.

Her Chinese colleagues, who went to Chinese automakers or Germany's BMW and Daimler, saw their wages almost double.

"(Toyota's) training is excellent, but the working conditions were bad. It has become a reaping ground for other businesses," she said.

The student said that once she obtains her MBA, Japanese companies will be off her radar in terms of employment.

She is not alone. Many who change jobs say they try to avoid Japanese, South Korean and Taiwanese companies, which have three problems in common: demanding work, low pay and little chance of promotion.

Personnel resources companies in China say wage levels at U.S. and European companies are about 1.5 times that of Japanese firms.

"If you offer salary levels of the past, then Chinese employees would flee," said Li Jun, 33, who quit an NEC Corp. affiliate to found a venture business in the environment field.

In good years for business, Li earns up to 100 million yen.

Born in a poor village in Sichuan province, Li said: "Because we can't foresee the future (in an unstable society), we want to build assets quickly. Companies are not aware of such pressing needs among Chinese workers."

A 33-year-old Chinese graduate of the University of Tokyo, who works for an independent administrative agency in Japan as a researcher, was surprised when he started looking for work in Beijing.

A major Japanese information technology firm offered only a quarter of what he earns now.

"That's so meager even though prices in Beijing are much lower than in Tokyo," he said.

A Chinese telecommunications firm, on the other hand, offered to match his pay in Japan.

"Chinese pay great attention to room for growth, such as how much the company will grow and what they would be allowed to do there," the man said, adding that Japan today doesn't offer such opportunities.

SEB's Dai also says promotion is a huge factor.

Dai has served as chief of Apple Inc.'s Chinese arm. "If Japanese companies do not entrust the post to Chinese, then they are not among the options."

Bo Le's Wong also points to the low level of CEO salaries at Japanese businesses.

Seeking equality among employees may be a Japanese business feature, but it does not work in China, she said.

Some Japanese corporations, such as trading house Mitsubishi Corp. and machinery maker Komatsu Ltd., are taking steps to promote Chinese employees to executive positions.

A locally hired Chinese was promoted to an executive post at Mitsubishi's Dalian subsidiary last year.

And in the Chinese offices of some major Japanese companies, there are cases where Chinese employees earn more than their Japanese colleagues.

But Jin Rui, general manager of Intelligence (China) Co., a Shanghai affiliate of Intelligence Ltd. of Japan, said most Japanese companies still put too much emphasis on Japanese language proficiency in hiring Chinese.

Meanwhile, as Chinese workers fetch higher salaries, young Japanese have emerged as lower-cost workers.

A 29-year-old Japanese man at a major U.S. call center in Dalian was surprised last summer to find his Chinese colleague was paid 13,000 yuan a month, much more than he got.

The employer raised the wages of Chinese after many hopped to a higher-paying U.S. rival and others demanded pay increases.

In Dalian, many offices are being set up to provide outsourcing services for Japanese businesses.

Such offices used to hire mainly Chinese, but they now are turning more to Japanese, who have difficulty finding jobs back home.

"There have always been openings for Japanese," said Wang Jin, head of Pasona Tech Dalian Co.

Chinese workers capable of speaking Japanese have strong academic backgrounds, but their initial pay is still generally lower than Japanese employees.

But in the industry, Japanese are said to be "low cost on the longer term" because they do not demand pay raises as Chinese do.

Japanese also tend to stay longer at one company, well aware of the tough job situation in Japan.

A major U.S. computer maker is also hiring Japanese for its call center in Dalian. In late October, five were newly employed from Japan, and their comments reflect the vast differences between the Chinese and Japanese job markets.

Ayaka Sakurada, 25, graduated from a British university but could not find a job in Britain or Japan. She has decided to study Chinese, too.

Yusuke Umewaka, 31, earned 270,000 yen a month at an apparel shop in Tokyo, but gave up on the "shrinking" retail sector in Japan.

A 28-year-old man quit a listed Japanese company, where he earned 6 million yen a year. He found his former employer, who rejected his proposals for new business, hopeless.

Junko Oishi, 36, came to Dalian after twice losing temporary staff jobs after the 2008 financial crisis. She says she could not expect to find a good job in Japan.


(This article was written by Tokuhiko Saito and Tetsushi Yamamura.)
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http://www.asahi.com/english/TKY201012270252.html
 

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the number of annual college graduates has grown 6 times in the past 10 years. Number of (high paying) jobs has not changed a lot.
 

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Here's more interesting reading on this topic. :)

Japanese businesses lose out in hiring of top Chinese talent

http://www.asahi.com/english/TKY201012270252.html
Even for non-top talents, Japanese companies are known for its uncomfortable working environment in China--for instance, routinely working late without compensation. But they are not the worst.

In the order from best to worst for mainland Chinese college graduates, the ranking is probably like(just my personal opinion based on friends and colleagues' experience)

Government jobs(arguably), American companies, European, State-owned, Japanese, Private-owned, Taiwanese and South Korean (notoriously known for their worst conditions and environment)
 
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