By Li Hui and Ben Blanchard
BEIJING (Reuters) - China is waking up to a potentially damaging mismatch in its labor market.
A record 7.27 million graduates - equivalent to the entire population of Hong Kong - will enter the job market this year; a market that has a shortage of skilled workers.
Yet many of these university and college students are ill-equipped to fill those jobs, prompting the government to look at how it can overhaul the higher education system to bridge the gap. The problem is part structural, part attitude.
While most liberal arts students are still looking for work after graduating this summer, 22-year-old Li Xidong is preparing to start a job as an electrician that he landed well before finishing three years of training at a small vocational school.
Li's diploma may appear less impressive, but his coveted job in a tight labor market may hold the key to the employment conundrum in the world's second largest economy. The machinery sector alone projects a gap of 600,000 computer-automated machine tool operators this year, media have reported.
"We're trained as skilled workers, it's quite easy for us to find jobs while still in school," said Li, who is in the final stretch of a 3-year program at Hebei Energy College of Vocation and Technology in Tangshan, an industrial city 180 kms (112 miles) east of Beijing.
"Seventy percent of our class found work and some others are starting their own businesses," Li noted, as he waited for a friend at a recruitment fair in the capital, where fewer than a third of this year's university graduates had found work by end-April.
The government has said it plans to refocus more than 600 local academic colleges on vocational and technical education - replacing literature, history and philosophy with technology skills such as how to maintain lathes and build ventilation systems. Course curricula will be tailored to meet employers' specific needs.
Pilot programs will be launched this year, and 150 local universities have signed up for the education ministry's plan, the official Xinhua news agency has reported.
"NOT GOD'S GIFT"
After 13 years of aggressive policy to expand academic colleges, China had almost seven times as many freshmen last year than in 1998. That rapid growth compromised educational quality, especially in local colleges established after 1999, experts say.
"Understanding of oneself and the job market, and training and education to face the job market, these are all missing in our ivory-tower style education," said Chen Yu, director of the China Institute for Occupation Research at Peking University.
Part of the problem lies with the students, too, who harbor unrealistic expectations, especially as China's economic growth loses momentum.
Chinese graduates are less willing than their Western peers to take blue-collar jobs, work in smaller companies or start their own businesses, hoping to land steady jobs instead in the government or high-paying white-collar work, Chen said.
"College students should know they are not God's gift and it's difficult to find jobs, so they can adjust their attitude and don't necessarily have to join the civil service or big state-owned firms," he added.
For instance, China's call-center sector needs 20 million workers to cater to its vast consumer population, but currently employs just 2 million due to a dearth of trained workers, says Yako Yan, chairman of the China Call Center and Business Process Outsourcing Association. "Call centers are technical labor ... graduates often don't have the technical ability. Some think it's relatively low-end and disapprove of it," says Yan.
That attitude and the harsher reality of China's jobs market today has left many graduates feeling helpless. In a changing market, many graduates with big dreams and high scores find they have few marketable skills.
"What we studied has no use in finding jobs," said Xu Ke, 23, who was at the same Beijing job fair and is soon to finish her course majoring in general marketing planning at an agricultural institute in eastern Jiangsu province. "In college, we thought companies would be queuing up to hire us. Now, I just hope I can find a job soon."
VOCATIONAL VS ACADEMIC
The government plans to reform the national college entrance exam system by setting up a technical training exam separate to the academic exam, Education Vice Minister Lu Xin was reported by Xinhua as saying. The ministry would also turn more than 600 local universities into higher-education vocational colleges, Lu said. China has 879 public universities and colleges, according to a 2013 ministry list.
"Vocational education has a bearing on China's economic transformation and upgrading ... and on the employment of hundreds of millions in the labor force," Yu Zhengsheng, the fourth-ranked member in the elite Politburo Standing Committee of the Communist Party, told a meeting of the national political advisory body earlier this month.
The ministry declined to comment for this article.
In recent years, graduates from higher vocational schools, which rank below universities in the Chinese system, have consistently done better in finding jobs than standard college graduates, Lu told the People's Daily, the official newspaper of the ruling Communist Party, in a separate interview.
Apart from the economic concern, the government is keen to move graduates into suitable jobs to prevent any formation of a restive young population - which played a major role in the 1989 pro-democracy movement. For years, Beijing has encouraged students to accept more lowly positions, such as village officials, especially in the less developed western regions, and to start their own businesses.
About 80 percent of higher vocational school graduates last year found jobs, while only around two-thirds of college graduates secured work, according to a report from the 21st Century Education Research Institute. Vocational college graduates also had a higher average starting salary - at 3,291 yuan ($530) a month versus an average 3,157 yuan among students from China's top-100 universities.
"We don’t necessarily need to sit in an office after graduating. I can start in the factories and work my way up, step by step," said Li, who hopes to pick up the practical skills that will allow him to move on to more advanced electrical work.
($1 = 6.2473 Chinese Yuan)
(Additional reporting by Jane Lanhee Lee in SHANGHAI; Editing by Ian Geoghegan)