Jobless China graduates mired in gloom amid slowdown

By Ian Ransom

BEIJING (Reuters) - Down-at-heel Xiaojiahe in Beijing's university district seems an unlikely haven for China's aspiring elite, but its reeking alleys and dank rooms offer a low-budget bolthole for graduates battling to find work.

"It's not the best living environment here," said Qi Shaoguang, a 22-year-old law graduate from China's dustbowl province of Henan, as he looked past a row of shabby brick huts. "People who find a good job tend to move out pretty quickly."

Qi shares a 10 square meter (about 100 sq ft) room in Xiaojiahe with an unemployed friend and a grimy public toilet with dozens of other tenants.

He is one of 1.2 million Chinese college graduates seeking work in a labor market that was already limping from years of bungled policy making before being almost crippled by the global financial crisis.

He will jostle for scarce jobs with another 6.1 million students set to graduate in the summer and untold numbers of skilled professionals already laid off in Chinese cities amid slumping growth.

"This year, it's not a question of finding a good job. It's a question of finding anything," said Qi, whose neighbors include cash-strapped students and newly arrived migrant workers, 20 million of whom have lost their jobs across the country.

The graduate job crunch has alarmed the Chinese government, which fears a rising tide of frustration and disillusionment could spill over into violence and confrontation in a year of politically sensitive anniversaries.

In June, China will pass the 20th anniversary of the brutal crushing of anti-government protests led by students centered on Beijing's Tiananmen Square in 1989.

A more likely danger, however, is creeping despair among millions of degree-holders -- once told that higher education would be their ticket out of privation, but now often forced to compete for menial jobs.

FRUSTRATION, SUICIDE

A final year student in northern Hebei province killed herself in February after months of job-seeking frustration. She wrote of her fear of "letting down" her family in her diary.

"A university student, who can't do anything, complaining all day about this and that, with high aspirations but low abilities, looking down on hard work, can't get a skilled job... This is the tragedy of a university student!" a excerpt of her diary reproduced in local media said months before she died.

The government response has mixed sympathy with censure, promising to pull out all the stops to find jobs for graduates, while demanding they abandon their "elitist" leanings and accept humbler work and lower salaries in more remote posts.

Chinese Premier Wen Jiabao made a surprise visit to a Beijing university in December, where he told students: "Your difficulties are my difficulties, and if you are worried, then I am more worried than you."

Authorities have rushed out a raft of incentives to get companies to hire and promised subsidies to graduates who launch their own "innovation-based" start-ups.