China has a College Problem

If you read certain conservative sources, you will often read allegations that China is secretly supporting this or that ideology in order to weaken America. But there is one idea that is as American as apple pie that is doing its bit to destroy China. And that is the idea that every good little boy or girl will go to college and get a white collar job. This insidious American idea (you could argue it is more an Anglo-Saxon one but I think America should take credit) is making China’s demographic problems a lot worse.

The basic demographic problem that China faces is that its working age population is dropping like a rock while the number of retirees soars. China’s work force has shrunk by 40 million in the last 3 years. That is like losing the entire population of Canada if Canada was solely populated by people 16 to 59 years old.

With people falling out of the work force at an accelerating rate, you would think that it would be a great time to be a young person in China looking for a job. But you would be wrong. In June of this year, the youth unemployment rate in China hit a record high of 21.3%. China promptly fixed this problem by no longer reporting this number so we have no idea how bad it is now.

How is it that China can have a demographic crisis that is crashing their working age population while at the same time having a high youth unemployment rate? The answer is simple. All those only children born as result of the one child policy were pushed to go to college by the same government that mandated that parents only have one child.

From the Council On Foreign Relations…….

For decades now, the Chinese government has encouraged university enrollment, pushing the number of students in higher education from 22 million in 1990 to 383 million in 2021. During the pandemic, it pressed even harder, expanding graduate-school capacity. Master’s-degree candidates rose by 25 percent in 2021. China’s Ministry of Education estimated that 10.76 million college students would graduate in 2022, 1.67 million more than in 2021—and it expects a further large rise in 2023.

383 million collage students currently enrolled in higher education is greater than entire population of the United States. Even for a nation as big as China, that is massive share of its young people to push through higher education. And for what? Do you need a collage degree to work on factory floor? Do you need a college degree to build a building? The point is, China is not producing near enough jobs that need college degrees (even taking an American HR departments view of what jobs “need” a college degree) to absorb all those college graduates.

The result is predicable. As the South China Morning Post delicately puts it….

Manufacturers and others are pointing to a growing mismatch between the jobs young people are looking for and the jobs that are in dire demand.

So the bottom line is that people with skills that China desperately needs can’t be found while at the same time a bunch of young people educated to sit at a desk can’t find a desk to sit at.

Anecdotally this problem is made worse by China’s culture. In America, it is common for young people to get a worthless degree and then go get a job in something that has nothing to do with that degree. They are not happy about it, but that is what they do. But in China it seems that going to school and being the first one in your family line to get a college degree makes it very shameful to then go work in a factory. So China’s collage graduates (often with the support of their families) seem very reluctant to face the fact that the degrees they got have no economic value and they have to look at jobs that they thought would be “beneath” them.

As was noted in the beginning, a lot of people focus on the bad things being imported from China to America. But it is a two way street and lot of bad ideas in America work their way into China and it seems like ideas that are bad in American seem to have an even worse impact in other countries. Overinvestment in higher education certainly seems to be an example of this. It is a big problem in America but it seems like an even worse problem in China.

But the more you look at China, the more this seems to be the rule rather than the exception. A lot of China’s problems stem from looking at what “success” looks like in other countries and deciding to copy that at an insanely rapid pace. They are now reaping the results of that in everything from demographics to skills gaps to overinvestment in real estate.

Leave a Reply

Your email address will not be published. Required fields are marked *