Unemployment Report: China's College Graduates Struggle to Find Jobs

Many college graduates from the West head to China in hopes of beefing up their resumes with work experience in the world's second-biggest economy. But China's university graduates may also be struggling to find work locally.

A recent report confirms that China's college-educated 21- to 25-year-olds are still struggling to find jobs.

The figures, published by the Chinese Household Finance Survey Center of Chengdu's Southwestern University of Finance and Economics, showed that in 2011, 16.4 percent of the urban population between the ages of 21 and 25 with an undergraduate degree or higher were unemployed.

But according to a report by Caixin Online, Gan Li, director of the research center, suggests that the unemployment numbers are actually a reflection of the high expectations Chinese graduates have.

"It was because many graduates held too high an expectation for their job," he said.

Chinese graduates seem to be holding out for higher-paying jobs, with salaries around 7,000 to 8,000 yuan a month ($1,122 to $1,282), opting to continue to look for jobs and thus being counted as unemployed.

This likely explains the lower unemployment rate of China's young without college educations. According to the report, only 4.2 percent of people who dropped out of school before middle school are unemployed in the same age bracket in the same urban areas.

Gan says the high unemployment trend is a temporary phenomenon and will eventually fade as recent graduates settle into lower-salary jobs.

But, the report also finds unemployment is rising for the general population. According to the data, 8 percent of all urban residents were unemployed in 2011, around 27.7 million people -- but this year the level had climbed to 8.5 percent in June.

Still, not all unemployed, or underemployed, college grads in China are in that position by choice.

In 2010, so-called "ant tribes" started forming just outside of China's major cities, due to soaring housing prices inside city limits. These "tribes" are large groups of university graduates doing jobs they are overqualified and underpaid for, usually earning no more than 2,000 yuan a month ($320).

The term was coined by Lian Si, a scholar and researcher at Beijing University. "They share every similarity with ants," Lian wrote in his book about the rising subculture of the young, educated and underemployed.

"They live in colonies in cramped areas. They're intelligent and hardworking, yet anonymous and underpaid."