The Unemployment Crisis: Universities' Data Fraud and Employment Scams
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The Premier of China, Li Qiang, warned that with more risks and challenges in the economic operation, the key groups (in China), including college graduates, migrant workers, and people who have just come out of poverty, are facing more pressure than before, according to his latest government report released in March.
He also set an ambitious target to create more than 12 million jobs and to maintain the surveyed urban unemployment rate at around 5.5% in the two sessions, the annual gathering for the Chinese legislatures.
The magnitude of the unemployment issues was reflected in some universities' attempts to fake job data so that they could maintain their enrollment quota from the authorities.
In addition, experts warned that the unemployment behind the false prosperity could also lead to sluggish consumption and mental problems that would harm social stability.
Mary Liu, 22, a student who graduated from a university in Shandong last year, suddenly found that she received a “fake offer” from St. Petersburg State Polytechnic University in Russia through the local graduate system.
The St. Petersburg State Polytechnic University is in Russia, and Mary Liu never applied to the school. (Photo Courtesy: Mary Liu)
“My university counsellor changed my information without notifying me in advance,” said Liu. “I felt angry at that moment because I was afraid it would affect my identity as a fresh graduate during the Civil Servants Examination.”
Liu was not the only graduate whose information was changed by her university, although the employment rate was not alarming among her classmates.
“I once proposed to cancel the change when I found the wrong information, but my counsellor said I still needed the university’s cooperation to examine my political record if I passed the exam,” said Liu.
She finally kept the “fake offer”, although she didn’t pass the exam because it was really hard to upload the proof and correct the wrong information, Liu added.
Liu’s experience echoed the government policy of evaluating majors by their employment rate.
The government will reduce the enrollment plan year by year until it is suspended if the unemployment rate of graduates in some majors is below 60% for three consecutive years, according to the government.
Meanwhile, the state-backed media, The Paper, also pointed out that some companies are providing employment contracts for as cheap as 68 yuan (around HK$ 73) for those students who are asked to fake the employment data to graduate.
Similarly, a final-year student who asked to be anonymous with the last name Xia, was required to sign an employment contract to graduate from her university counsellor.
“My university counsellor didn't threaten us directly, but she asked us to fake the proof through an employment agreement template,” said Xia. “It’s not difficult for us to provide this fake contract, so we all turn it in and hope the counsellor won’t trouble us.”
Xia claimed that the counsellor said, “The government has policies, we have counter measures”, and the fake contract wouldn’t affect your identity as a fresh graduate, but keep that for you.“
We usually fill out our relatives' contacts in the form so that they can cooperate with the survey from the education bureau after two or three months we handed in the forms, Xia said.
Xia’s class has the best employment rate of 90% among its peers, which achieves about 70%-80% for the rest of the classes.
However, the actual employment rate is under 20%, according to Xia.“The fake employment contract did not affect us in any way, but it perfectly finished the surface work,” Xia added.
Besides the fake employment data, scammers capitalise on the strong demand for jobs and give rise to job scams.
A case in point is famous Chinese actor, Wang Xing, was scammed into a scam farm in Thailand. In January, Wang was tricked into casting in Myanmar from Thailand, but after arriving in Myanmar, he was kidnapped to a scam farm.
The Chinese government cooperated with the Thai police force and saved him from the farm five days later, according to the state television broadcaster, CCTV.
The accident soon became a heated topic on social media, and the State Council Information Office of China warned the public to remain vigilant and avoid falling victim to fraudulent overseas job offers, which turned out to be cross-border fraud schemes.
Zhang Xinmiao, 28, a short reel drama actress, was almost scammed by the same group of scammers who sent Wang Xing to the scam farm last December.
The scammers’ company is called Grammy, and they lurk in some casting groups to do scams. (Photo Courtesy: Zhang Xinmiao)
“The scammers didn’t offer high salaries to attract me, and all procedures were as normal as the common casting,” said Zhang. “However, I found they adjusted the timeslots with my schedule many times, which is impossible for a small actress in this industry.”
Zhang used to work in a drama troupe in Hebei, but the troupe went bankrupt during the pandemic as few audiences came to theatres to watch a drama on the spot. She soon turned out to be a freelancing short-reel drama actress.
Zhang (left) worked as an actress for eight years after graduating from Shanghai Theatre Academy. (Photo Courtesy: Zhang Xinmiao)
“For actors, when the film is completed, we lose our jobs,” said Zhang. “There are few positions in a movie, but a lot of actors are waiting for casting.”
“We have to try every single chance to get jobs, and that’s also why we were steered by those scammers,” said Zhang.
The vicious cycle of unemployment in China’s economy
With more graduates coming to the labour market, unemployment will affect not only economic development but also one’s mental health.
There will be 12.22 million graduates in China this year, which will increase by 3.6% compared with a year earlier, according to the National Bureau of Statistics.
Thomas Yuen Wai-kee, an assistant economics professor from Hong Kong Shue Yan University, regard the slow economic growth caused by weak domestic consumption as an important consequence.
“Young people are a major force of consumption, but how could they consume more without a job?” said Yuen. “Although we reached the 5% goal of GDP last year, it was still lower than years before.”
The general public reduced their consumption after the pandemic, and the young people decreased their costs further because of the high unemployment rate, Yuen added.
To boost spending, the world's second-largest economy published a series of policies last year.
The central government provided around 300 billion yuan in ultra-long special treasury bonds to subsidise consumers who wanted to buy electronic devices, EVs, furniture, etc. Another 1.3 trillion yuan of long-term special treasury bonds will be issued this year to boost consumption, according to Li Qiang, the premier of China, in the two sessions.
The total retail sales of consumer goods increased by 3.5%, reaching 48.33 trillion yuan (around HK$ 51.28 trillion) in 2024 compared with 2023. Online retail sales contributed to around a quarter of the total sales of consumer goods, according to the NBS.
Nonetheless, Li also acknowledged that consumption was “extremely sluggish” last year, and he will “vigorously boost” household demand in the coming year in his government report.
The CPI of China, the key indicator of inflation, showed a continuous slump in consumption. The figure declined by 0.7% in February, which was steeper than Bloomberg’s estimation of 0.5% and the first negative inflation in more than a year, the NBS data showed.
Gary Ng, the senior economist at Natixis, said, “When we looked at the triggers of the Chinese economy, it’s really about whether China can transit to more consumption than before.”
Geopolitics hugely impact exports nowadays, and there is also a huge question mark on whether China can get that much investment in manufacturing previously, Ng explained.
Mental burden arising from unemployment
In addition to the economy, Julian Pfrombeck, an assistant professor at the Chinese University of Hong Kong, pointed out that related research shows that involuntary unemployment is associated with people’s mental well-being, such as depression, anxiety, and psychosomatic symptoms.
Pfrombeck’s shared insights echoed research from the University of Erlangen-Nuernberg in 2008 that the average number of unemployed persons with psychological problems was 34%, nearly double the number of employed persons.
“If you become unemployed, it can be a career shock with strong effects in the short term,” Pfrombeck said. “In the long term, unemployment can represent a constant source of stress and strain that could lead to depression and have severe health consequences.”
For youth unemployment, a lack of opportunities to gain job experience is a big problem. If young adults become unemployed right after graduation, the situation may initiate a negative spiral leading to increasing disadvantages and stigmatisation compared to their peers who have already been employed, Pfrombeck added.
Mia Sang, 22, a final-year student from Hong Kong Baptist University, was one of those who felt anxious when seeking employment from both Hong Kong and China.
“I submitted about 200 job applications during the past year and only three of them gave me a chance to interview,” said Sang. “Sometimes I felt so anxious that I couldn’t afford to sleep at night.”
For most of the time, Sang just listened to music to cope with the anxiety.
“I was always afraid of being unemployed since I have no working experience and a lack of competence because of graduating from a non-renowned university.”