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UNCLAS SECTION 01 OF 03 GUANGZHOU 000196 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/TC, EAP/CM 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV CH
SUBJECT: Lower our expectations: It's a job tough market out there 
 
(U) This document is sensitive but unclassified.  Please protect 
accordingly.  Not for release outside U.S. government channels.  Not 
for internet publication. 
 
Summary 
 
¶1.  (SBU) Summary: Don't get your hopes up!  That's the message 
employment agencies, university career centers and society at large 
are sending university graduates in South China.  To lower 
expectations as students prepare to enter a tough job market, 
university employment centers retelling them not to be "picky" 
about jobs, yet are taking special measures to improve job-seekers' 
prospects.  While acknowledging the current economic downturn, a 
more fundamental problem, according to one university official, is 
the oversupply of college graduates and lack of labor mobility. 
Many university officials expressed confidence in the government to 
counter the downturn successfully, a view echoed by university 
students at a job fair.  However, it is unclear how much students 
have contemplated what a prolonged economic downturn might mean for 
them.  End Summary. 
 
A Three-Pronged Attack on High Expectations 
------------------------------------------- 
 
¶2. (SBU) The government has a three-pronged approach for managing 
the expectations of new graduates seeking jobs, according to Nan 
Fangsheng, the director of the South China Market of Human 
Resources.  Employment agencies, university career centers and the 
media each play a role in telling university graduates in South 
China to lower their expectations as they prepare to enter a tough 
job market.  Sheng said his center is the largest state-owned 
employment agency of its kind in China, last year helping four 
million job seekers through job fairs and its website 168.com. 
Agencies like his supplement the message of lowered expectations 
that students get at their campus career centers.  Sheng said that 
this message is also reinforced through the "social environment" 
primarily from the media. 
 
¶3. (SBU) Sheng said demand for his center's services had been higher 
than in past years, due not only to the economy, but also to the 
ever-larger number of college graduates.  He added that Guangdong's 
draw for workers from surrounding provinces placed additional 
pressure this year on the province to help resolve an issue 
affecting China nationally.  While he could not say what percentage 
of students would be unemployed this year, he estimated that roughly 
10% of 2008 graduates were still without work.  Sheng downplayed the 
impact of student underemployment, adding that students would 
adjust.  Although salary expectations will vary according to the job 
offered, Sheng said that students are now asking for starting 
salaries of RMB 1,000-3,000 monthly (about US$150-450). 
 
Even the Elite Will Need to "Ride a Donkey" 
------------------------------------------- 
 
¶4. (SBU) Graduates' salary and overall job expectations are higher 
at well-regarded schools like the Guangdong University of Foreign 
Studies (GDUFS), but it falls to Ye Zhao, director of the school's 
career center, to adjust students' expectations downward.  She 
stated that traditionally 99% of GDUFS' graduates have found jobs in 
foreign-invested enterprises (FIEs) or import/export firms before 
graduation, using their foreign language and business degrees. 
Starting salaries have averaged 3,500 RMB per month, higher than the 
local average, raising graduates' expectations in recent years. 
However, this year Zhao and her staff of six are bluntly advising 
GDUFS' 5000 graduating students to "lower their expectations and not 
be picky."  Specifically, guidance counselors are advising students 
to broaden their job search beyond FIEs and Global 500 firms and 
focus more on domestic small and medium enterprises (SMEs).  She 
said students have understood the situation and now accept jobs 
paying around 2,500 RMB (roughly US$365) a month, but would regard a 
monthly salary of 1,000 RMB as unacceptably low. 
 
¶5. (SBU) According to Zhao, most graduates believe that the economic 
downturn is a short-term situation and they are adjusting by 
temporarily accepting lower-paying jobs and gaining experience until 
better ones open up, or "riding a donkey to seek a horse," as she 
put it.  About 10% of graduating students will choose to put off 
their job search and pursue advanced degrees, either in China or 
overseas, to become more competitive candidates, she said.  She 
expected less than 10% of current graduates to be unemployed six 
months after graduation.  However, when asked if students were 
 
GUANGZHOU 00000196  002 OF 003 
 
 
optimistic or pessimistic about the economy generally, Ms. Zhao 
replied that "students are neither optimistic nor pessimistic - they 
are just focused on getting a job."  If the downturn were to 
continue, she said, students should be proactive and consider 
starting their own businesses, looking to the government for help 
with loans or training. 
 
A Structural Problem 
-------------------- 
 
¶6. (SBU) However, the current economic crisis alone isn't enough to 
explain the problem university that students face.  There is a 
fundamental imbalance caused by a structural oversupply of graduates 
in the more developed cities of the Pearl River Delta complicating 
their job prospects, according to Xiao Ning Feng, the director of 
the career center at South China University of Technology (SCUT). 
As part of a push to raise living standards and numbers of educated 
citizens, Feng said, the government has "encouraged" SCUT to boost 
undergraduate spots by 6,000 and post-grad spots by 3,000.  Upon 
graduating, 80% of the students want to stay in the Guangzhou, 
Shenzhen, Zhuhai or other large cities and are not willing to settle 
down in what they consider the less-developed "backwaters" of 
Guangdong province.  Students believe that the larger cities have 
better job opportunities; as a result, newly-minted graduates are 
pursuing a limited number of "desirable" jobs.  SCUT claims its 
alumni have done well with 92% graduating with jobs last year.  But 
Feng estimated that there were about 500,000 job seekers in South 
China last year and roughly 20% of them could not find employment. 
He also pointed out that job competition had intensified as Chinese 
returned home in search of better job opportunities after living 
overseas and seeing prospects abroad dry up. 
 
Less Complacent Placement 
------------------------- 
 
¶7. (SBU) Both SCUT and GDUFS are adopting similar measures to 
increase students' chances at finding work.  From freshman and 
sophomore years, both schools encourage students to study something 
"practical," that will lead to good offers.  They offer a variety of 
job-hunting classes and workshops and maintain in-house databases 
and websites where employers and alumni can recruit students.  In 
addition, each school has organized on-campus job fairs.  Zhao from 
GDUFS said she was aggressively enlisting professors and alumni to 
help graduating students.  Aside from these more traditional 
methods, Feng from SCUT said he was encouraging graduates to 
consider job offers in less-developed cities by facilitating 
incentives like student loan forgiveness and emphasizing that 
students pursue job experience first and foremost; he also advises 
they put off thinking about where to settle down until later.  SCUT 
has a program that gives students from other provinces a two-year 
window to look for jobs nationwide, but Feng acknowledged that if 
students do opt for settling down in an "undesirable" area, it may 
be difficult to move to one of the more developed coastal cities 
because of hukou restrictions. 
 
Students Not Angry, But Goals Are More Modest 
--------------------------------------------- 
 
¶8. (SBU) Conversations with attendees at a 168.com-sponsored job 
fair at Guangzhou's University City, the location of ten colleges, 
revealed that students have been paying close attention to the 
economic downturn.  Although some students expressed concern about 
their job prospects, none displayed despair or pent-up anger.  There 
was no sense of bitterness, blame or a feeling of an entitlement 
missed after years of hard work.  Rather, students seemed to have 
adjusted their expectations downward and were focused on achieving 
more modest goals.  Several said that whereas before they were 
expecting RMB 2,500 to 3,000 as a starting salary, they were willing 
to accept salaries as low as RMB 1,500.  Affirming the assessment of 
Feng from SCUT, students from rural areas or other provinces said 
they would rather find a job and stay in Guangzhou than return home, 
their concern about underemployment tempered by where they wanted to 
live.  Students from top-tier colleges in the region seemed to be 
the least concerned about underemployment or the impact of the 
downturn on their job prospects. 
 
¶9. (SBU) Overall, students were quietly confident that the 
government would resolve the problems and the economic situation 
would turn around before too long, especially once stimulus spending 
begins to have an effect.  They acknowledged that they felt pressure 
to get a job and succeed, not only for themselves personally, but 
 
GUANGZHOU 00000196  003 OF 003 
 
 
also for their families, especially among those from the 
countryside.  Many indicated that they would return home and their 
parents would support them if they were unable to find a job 
quickly.  However, when asked what they would do if the downturn 
lasted six months, a year or longer, many students seemed baffled 
that the downturn could last so long and had not seemed to 
contemplate this possibility. 
 
 
GOLDBERG