China’s Central Bank recently announced projections for 2009 economic growth of just under 8%. The IMF’s more conservative prediction of 6.5% growth for the country is probably more accurate. While these numbers are well below China’s explosive annual GDP growth numbers over the past decade, it is likely that China will fare better during this year’s global economic crisis than most other countries in Asia. Even in the wake of factory shutdowns and rising costs due to labor law enforcement, many analysts predict that foreign companies in China will begin a trend toward increased hiring again by the end of 2009.
Increased hiring is good news for China’s 5.5 million 2008 graduates of higher institutions of learning. Almost one year after graduating, more than 30% of these individuals are reportedly still out of work. Estimates show that another 6.1 million Chinese students will graduate in 2009. This graduate count is higher than the total number of students enrolled in Chinese universities only 9 years ago. Today there are more than 20 million currently enrolled students.
The astounding growth in access to higher education in China has had both positive and negative affects on foreign companies operating in the country. On one hand, foreign companies have appreciated the increased availability of local talent in positions ranging from technical to managerial. To the extent that locals can replace expensive expatriates in the workforce, foreign companies will be able to make their operations in China more cost-effective. This is particularly crucial during the current recession, when companies must carefully consider their global human capital strategies.
On the other hand, many HR managers of foreign companies in China have expressed concern at the lack of practical business skills displayed by local graduates. While the number of students enrolled in local universities has increased dramatically over the past decade, school facilities and the number of faculty have often been severely insufficient. Some universities that were once revered specialty schools (in law or medicine, for example) have now expanded their programs to churn out degrees in business or English. Although elite schools such as Beijing University and Tsinghua University have maintained their reputations of academic excellence, employers have come to understand that a higher degree in China does not necessarily mean that the graduate will be equipped with the skills necessary to function in a Western business environment. In many cases, the abundant availability of labor has made it more difficult than ever for companies to pick out true talent among the masses.
Increased hiring is good news for China’s 5.5 million 2008 graduates of higher institutions of learning. Almost one year after graduating, more than 30% of these individuals are reportedly still out of work. Estimates show that another 6.1 million Chinese students will graduate in 2009. This graduate count is higher than the total number of students enrolled in Chinese universities only 9 years ago. Today there are more than 20 million currently enrolled students.
The astounding growth in access to higher education in China has had both positive and negative affects on foreign companies operating in the country. On one hand, foreign companies have appreciated the increased availability of local talent in positions ranging from technical to managerial. To the extent that locals can replace expensive expatriates in the workforce, foreign companies will be able to make their operations in China more cost-effective. This is particularly crucial during the current recession, when companies must carefully consider their global human capital strategies.
On the other hand, many HR managers of foreign companies in China have expressed concern at the lack of practical business skills displayed by local graduates. While the number of students enrolled in local universities has increased dramatically over the past decade, school facilities and the number of faculty have often been severely insufficient. Some universities that were once revered specialty schools (in law or medicine, for example) have now expanded their programs to churn out degrees in business or English. Although elite schools such as Beijing University and Tsinghua University have maintained their reputations of academic excellence, employers have come to understand that a higher degree in China does not necessarily mean that the graduate will be equipped with the skills necessary to function in a Western business environment. In many cases, the abundant availability of labor has made it more difficult than ever for companies to pick out true talent among the masses.
