China suffers from skill shortages despite millions of graduates each year

China has many graduates getting out of universities every year. In 2014 a record of 7,26 million students graduated from the country’s universities. However, China continues to suffer from skill shortages.


As Scott Rozelle, co-director of the Rural Education Action Program at Stanford University and the author of many papers on vocational education in China, said “You can build as much as you want, but unless you get good teachers, good curriculum and a system that assesses and rewards high performing schools with more resources, it’s just going to be a waste of money,”

“This particular finding demonstrates the extent of Asia’s talent mismatch and the severe shortage of suitably skilled local professionals in many industries and sectors,” said Christine Wright, Managing Director of Hays in Asia.

“It also highlights the need for employers to continue innovating to attract candidates in a tight labour market. This is especially important since 48 per cent of employers told us they expect their permanent staff levels to increase in the year ahead and 72 per cent expect their level of business activity to increase”, Mrs. Wright added.

The problem of the skill shortage impedes the procedure of China moving up the manufacturing value chain. The Chinese government is overhauling the vocational school system and is trying to make less strict the rules applied to foreign professionals regarding hiring and acquiring residency permit.

Students in vocational schools expressed how school feels like factory work. This gap in skill set reflects how poorly designed the Chinese education system is. Students are forced through the same “Gaokao” system where everyone is forced to take on stressful examinations that will determine their future.

Even worse, despite all this stress and effort, more than 2 million of the students who take the examination will not get accepted into college.

The examinations are so stressful that they have even been connected with cases of students’ suicides. According to the Annual Report on China’s education of 2014, (the Blue Book of Education) in the cases of 79 suicides commited by elementary and high school students that occurred in 2013, the 93% was due to arguments with teachers or because of the heavy pressure of studying.

Another problem with Gaokao system is the similarities with the Imperial Chinese examinations which were last implemented during the Qing Dynasty. The curriculum development was not aligned with requirements of the real economy.

Families, who are richer and can afford overseas studies, are selecting those alternative. The annual Gaokao registration has been falling. In 2016, 9,4 million candidates took the Gaokao whereas in 2008, 10,5 million had applied.

The focus on vocational schools is similar to Singapore’s economic strategy in the 70s. The nation state worked with top manufacturers to develop specific internships. World class manufacturers collaborated with Singaporean polytechnics to produce top class technicians.

It is not easy to implement this strategy in China today. Manufacturers are no longer willing to invest in China as much as they were 20 years ago, due to the cost of labor that has increased the recent decade.

The government’s current five-year education development plan (2016 20) entails the improvement of teaching facilities in rural schools. As of today, there Chinese students who are leaving the country each year for overseas studies, are more than the foreign students arriving to study in China. Only in 2015, 523,700 citizens left China for schooling abroad, increased by 13,8% from 2014

China is also struggling to obtain a more skilled workforce. To that purpose, higher-education institutions have more than doubled since 2000, to 2,529. About 7,5 million students graduated last summer, a number which is eight times bigger than the correspondent in 2000. However, at the same time, Chinese citizens keep leaving the country. For example, in 2015 only, 304,010 Chinese students went to the U.S. for studies.

Since February 2016 the government has been trying to make it easier for foreign students to find jobs in China. It has also reduced the time that residency permit applications need in order to be approved by foreign professionals according to the national 1,000 Talents Plan. These policies tend to ease China’s temporal skills gap.

In addition to foreign talent pipeline, China is also reforming its Hukou policy. Provisional regulations now allow migrants to apply for a residence permit in the city where they have worked or lived for a period of more than six months. For example, the Beijing municipal government has decided that citizens from other parts of the country who wish to stay in the city must first apply for a temporary residence permit upon arrival and then, after six months, they can apply for a permanent residence permit, provided that they meet basic conditions. The citizens who own a permi will be eligible for a Hukou, if they meet the basic requirements (Making social security payments for seven consecutive years in Beijing and having an adequate number of qualifying points).

Manpower policy reforms help to ease temporal gaps. China will have to reform education to form more permanent solutions. China will need a standardized set of national examination criteria. Jiangxi, Shandong and Liaoning standardized theirs in 2015, and this year will follow 25 more provinces and municipalities. China will also need to review their Gaokao syllabus and build international recognition.