Learning to adapt to job market shifts

Structural imbalance of mismatched supply and demand must be addressed to promote full employment of university graduates

University graduates represent a valuable human resource for the nation. Promoting their employment is crucial not only for the realization of China’s employment-first strategy and the goal of high-quality, full employment, but also for the well-being of young graduates and their families. According to the Ministry of Education, the class of 2026 will see 12.7 million young people graduate from regular higher education institutions, indicating significant pressure on the employment front. Many graduates still face real challenges in the job market, making their full employment a top priority for stabilizing employment.

The employment of university graduates faces both quantitative pressures and structural issues, with the latter being the primary challenge. The mismatch between supply and demand in human resources is the main contradiction in China’s employment landscape. Efforts should be made to resolve the structural employment issues. Currently, these structural imbalances in graduate employment manifest in several ways.

First, there is a mismatch in professional structures. Some fields, such as the humanities, produce more graduates than the market demands, whereas certain engineering fields face a shortage. Humanities graduates find it harder to secure employment, with a 2024 employment rate of 73.5 percent compared to 86 percent for science graduates, as reported by China Newsweek. Similarly, Mycos Research Institute shows that the employment rate for engineering graduates in 2023 was 89.4 percent, while law graduates had a rate of just 77.7 percent.

Second, there is a mismatch in educational and skill structures. As China undergoes industrial transformation and upgrading, industries such as manufacturing and construction face labor shortages and high demand for skilled workers. However, due to factors such as salary and career perceptions, vocational school graduates are in short supply, while general university graduates are in surplus. Data from the Ministry of Industry and Information Technology indicate that there was a talent gap of nearly 30 million in the 10 key areas of China’s manufacturing industry in 2024, with a shortage of 22 million skilled technicians.

Third, there is a mismatch between job expectations and available positions. Many graduates and their families have high expectations, desiring jobs in the public sector, large enterprises, or major cities in the central and eastern regions. Meanwhile, there are significant labor shortages in the western, remote areas, and grassroots positions in counties and towns, leading to a coexistence of “difficulty in employment” and “difficulty in recruitment”.

There are three major challenges facing graduate employment.

First, the global and domestic economic landscape presents challenges. Geopolitical tensions, rising trade protectionism and slowing global trade growth have put export-oriented enterprises under pressure. The restructuring of global supply chains has led to capacity shifts and job losses in coastal foreign trade companies, reducing demand for labor. Additionally, domestic demand remains insufficient, with a prominent mismatch between strong supply and weak demand, posing transformation challenges for traditional industries and reducing job opportunities for graduates.

Second, the artificial intelligence revolution impacts graduate demand. The latest technological revolution, including AI, poses unprecedented challenges to the youth job market. AI technologies such as large language models and embodied intelligence are replacing certain professions and roles, directly affecting demand for university graduates. Moreover, AI is redefining work, accelerating changes in job competency requirements. Current university curricula and teaching content struggle to keep pace with these new demands, posing further challenges to graduate supply and demand matching.

Third, the employment mindset of the new generation of graduates has changed. Similar to the NEET (not in employment, education or training) phenomenon in some developed countries, some Chinese graduates also experience graduation without employment, slow employment and delayed employment. Some graduates, particularly those from better-off families, are not in a hurry to find jobs. A survey by domestic recruitment portal Zhaopin in 2024 showed that the proportions of graduates opting for slow employment and freelance work increased to 19.1 percent and 13.7 percent, respectively. The changing employment mindset of Generation Z is becoming a significant variable affecting employment policies.

Globally, youth employment is a shared challenge. The International Labor Organization’s “World Employment and Social Outlook: Trends 2026” reports a global youth unemployment rate of 12.4 percent in 2025, significantly higher than the overall unemployment rate. Approximately 260 million young people are in NEET status, with higher-educated youth facing increasing vulnerability in the labor market. As industrial structures adjust and technology advances, the youth employment structure is undergoing profound changes, with traditional job opportunities decreasing and young graduates facing multiple risks, including a lack of vocational skills and exacerbating psychological issues.

In line with the 15th Five-Year Plan (2026-30) and the 2026 Government Work Report, several aspects should be considered to promote graduate employment.

First, the quality of higher education talent supply should be enhanced. Human resource development trends need to be accurately assessed, and education, training and employment efforts coordinated. Academic disciplines and majors need to be adjusted based on societal needs and industrial demands, using employment outcomes as key criteria for resource allocation, educational quality assessment and enrollment planning. The development of modern vocational education should be accelerated, and the integration of vocational and general education, industry-education integration and science-education convergence should be promoted to cultivate more high-quality technical and skilled talents.

Second, the quality of public employment services for graduates must be improved. Campus recruitment and employment market services must be strengthened, the sharing of recruitment resources within and outside campuses promoted, and regional and industry-specific graduate employment markets developed. Entrepreneurship needs to be leveraged to drive employment and optimize innovation and entrepreneurship services for students. Recruitment arrangements need to be standardized, and the recruitment of graduates by government agencies, public institutions and State-owned enterprises coordinated. Human resource service agencies and social organizations should be supported to provide specialized employment services for graduates.

Third, graduates should be guided to adjust their employment mindset and actively adapt to AI technology. It is recommended that government departments, universities and enterprises collaborate to guide graduates in aligning their interests with societal needs through thematic lectures, optimized career education courses and internships, so as to foster a rational employment outlook. Universities should incorporate AI basics, data analysis and human-machine collaboration into general education courses and partner with AI companies to develop courses and build laboratories, encouraging graduates to acquire AI skills and enhance their “AI+” composite capabilities to meet the new requirements of the AI era.

The author is the deputy director and a researcher at the Human Resources Research Office at the Institute of Public Administration and Human Resources affiliated with the Development Research Center of the State Council.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.