China seeks to spur job prospects to record number of fresh graduates

Posted on

Job seekers attend a job fair open to college graduates and the general public in Shijiazhuang, China, on February 6, 2017.Thomas Peter/Reuters

China will offer subsidies, tax breaks and easier loans to boost prospects for college graduates, the cabinet said on Friday, as a record number prepares to enter the workforce this year amid downside risks to economic growth stemming from COVID-19 curbs.

Subsidies are aimed at small companies, while graduates who launch start-ups will get tax breaks, easier loan terms, and even rent-free space, the State Council’s general office, or cabinet, said in a notice.

“China … encourages employers in COVID-hit regions to sign employment contracts with college graduates online,” he said, pledging support for small and medium-sized companies that hire more college graduates.

China wants to promote the healthy development of the online platform economy, he added, referring to a sector that is a huge source of jobs, important at a time when a record 10.76 million are set to complete college this year.

“‘Red lights’ and ‘green lights’ will be installed to promote the healthy development of the platform economy and encourage more jobs,” the notice said, referring to the incentive system.

But the worst COVID-19 outbreak since 2020 has added to the stress students face, and puts the small companies at risk at the heart of the world’s second-largest economy.

China’s “dynamic clean-up” policy of the Omicron variant of the coronavirus has led to full or partial lockdowns in dozens of cities, including a six-week citywide shutdown in commercial hub Shanghai.

Small businesses, in particular, suffer from the accompanying disruption to services and logistics.

China wants to add more than 11 million urban jobs this year, rising to as many as 13 million, Premier Li Keqiang said in March. But recently he called the job situation “complicated and bleak.”

Li added, “stabilizing employment is very important for people’s livelihoods, and is the main support for the economy to operate within a reasonable range,” in remarks prepared for a teleconference with provincial leaders on Saturday.

The urban unemployment rate surveyed by China hit its highest level in almost two years in March at 5.8 percent, while the rate for job seekers aged between 16 and 24 hit 16.0 percent, the highest since July 2021, official data showed.

Policymakers should aim to get the labor market back on track to maintain economic growth, even if the annual GDP growth target may be difficult to meet, analyst Julian Evans-Pritchard, at Capital Economics, said in a note on Thursday.

Be smart with your money. Get the latest investment insights delivered straight to your inbox three times a week, with the Globe Investor newsletter. Register today.

Leave a Reply

Your email address will not be published.