Chen Hua was born in 1980. In 2001, he left his rural home in Anhui to study business administration at the Central Party School in Beijing. He graduated in 2004, and, after failing to get into graduate school, stayed in the capital to look for work. In the following four years, Chen changed jobs five times in his search for decent work. Finally, in April 2008, he started his own business.

Chen Hua’s parents are farmers. He has a younger brother who went out to work straight after graduating middle school. When Chen Hua was studying at university, his brother started his own business. When Chen Hua was looking for work, his brother was already the boss of a factory workshop in Hangzhou. When Chen Hua went home for the 2008 Spring Festival, his younger brother’s child could already run around and call him “uncle.”

Studying at university has traditionally been seen as the best way out of poverty for rural families in China. A university degree was supposed to bring a good job, high status and, crucially, a residency in the big city that would allow them to start their own family. However, as the above passage from Ant Tribe, the recently published study on the lives of university graduates in Beijing, shows, the reality for today’s graduates is very different.

A university degree is no longer a guarantee of employment, and many graduates have no option but to accept jobs paying little more than those of factory workers who left school aged 15. Graduates from rural areas or small towns, who attended second or third string colleges can usually only get entry level jobs in white collar professions such as education, finance and the media, sales and marketing, etc that, according to a detailed survey in Ant Tribe, pay on average between 1,500 yuan and 2,000 yuan a month. They live in crowded enclaves in the outer suburbs of Beijing, and many have to travel up to three hours each day just to get to work.

Even urban graduates from the more prestigious universities in the capital are now struggling. The 2009 Report on Graduate Employment in Beijing showed that both employment prospects and salaries for graduates declined in 2008. The employment rate six months after graduation fell from 93 percent to 88 percent, and average wages fell by 11 percent during the year, from 3,080 yuan a month in 2007 to 2,746 yuan a month in 2008.

In order to enhance their employment prospects, or even just get a foot on the employment ladder, more and more graduates are seeking out internships. However, many of the internships offered by companies in China provide minimal training for little or no pay, no benefits and no protection under labour law, and no guarantee of future employment. Many graduates, desperate to get a decent job, have been tricked by misleading or dishonest company recruiters, and found themselves either trapped in a company or discarded after their internship with no additional qualifications. CLB has become aware of several such cases, outlined below. Pseudonyms have been used to protect the identity of the graduates concerned.

Internship certificates

The experience of Mr Xu, a chemistry graduate from Tianjin Oil Vocational Training Institute, is particularly apposite. Prior to graduation in 2009, Xu attended a career fair at his college. The companies at the fair all offered graduates on-the-job training for three to six months, after which they would be awarded with an “internship certificate,” a necessary qualification for working in a particular field, such as the petrochemicals industry. Once the interns had their certificate, they were told they would be free to either continue working with the company or find another job in the industry.

Xu signed a contract with the Shandong-based Haike Group, and was assigned to work at the company’s oil refinery on the banks of the Yellow River, near Dongying. After signing with Haike, Xu discovered that he would only be granted his internship certificate after working at the company for three years. Moreover, he and his fellow interns would have to work six months rather the promised three before converting to “staff status.” As an intern, Xu earned between 800 yuan and 900 yuan a month, working shifts seven days a week with no time off. Interns underwent frequent work assessments, and those who failed to meet the company’s arbitrary standards had their wages docked.

When he was made a full staff member in October 2009, his salary increased to between 1,800 yuan and 2,000 a month, although that salary was rarely paid on time. His salary did not include accommodation and food, and the company imposed strict penalties for violations of its internal regulations, for example, absentees would be fined up to 100 yuan for each day’s leave. And employees could not even apply for leave until they had been on staff for more than one year. So, in reality, new graduates would have to work 18 months before they could take any time off all.

If Xu and his classmates wanted to collect their internship certificates and look for another job before completing their three year tenure at Haike, they would have to pay the company 3,000 yuan in “compensation,” he said.

“We know the company is unjust, but we need the certificate,” Xu told CLB. “Without the certificate and some concrete work experience, you can only get a job that pays 800 yuan a month, at least the oil industry is booming and we do get paid each month.”

In another case, Mr Wang, a fourth year engineering student, accepted an internship at a foreign trade firm. The company promised Mr Wang and ten other graduates on-the-job training overseas for eight months, but no details were provided. When the students arrived at their destination, they were assigned manual work, such as cleaning and haulage, and the training period was shortened to three months. The students’ conditions were essentially no different from contract labourers with no educational qualifications. Wang tried to quit but was told by the manager that, if he did, he would have to pay back the costs of his “overseas training.”

No employment rights

Because they signed an internship contract rather than an employment contract, interns have very few employment rights and can be dismissed by their employer with virtual impunity. In November 2009, the Beijing Times reported the case of an intern at the National Theatre in Beijing who was fired after he tested positive for the hepatitis B virus. He filed a lawsuit against the theatre, seeking 40,000 yuan in damages, but his claim was rejected by the court on the grounds that his relationship with the National Theatre was “not labour-related,” and therefore not protected by China’s labour laws.

It is very common for interns to have to work for an additional three or six month probationary period after their internship concludes and before being upgraded to a staff position. Other companies seek to recruit graduates with a relatively high probationary salary and then discard them after the probation period, essentially using them as short-term contract workers. Mr Ye, for example, graduated in 2007 and got a job paying 1,200 yuan a month. Happy with his remuneration, Ye asked to continue with his job after his probation. Management agreed and told him that his new salary would be around 500 yuan a month. Ye left the company is currently looking for alternative employment.

The reasons why graduates fall into the “intern trap” are not hard to find. There is a huge over-supply of graduates at present, with between six and seven million new graduates seeking work each year. These graduates are under massive pressure to find work, not only to survive on a day to day basis, but also to reimburse their parents who had to invest tens of thousands of yuan in their university education. Some graduates like Xu were well aware of the inequities of the system but were willing to tough it out because the alternative of a low-paid manual job was even worse. Other students are clearly unaware of what they are letting themselves in for; they understand little about the job market and receive little or no help or guidance from their schools. Indeed, universities very often collude with employers to help them recruit batches of students from the same class, with little regard to the needs, interests or welfare of the individual students. Two students, for example, were recruited at a school career fair by a company claiming to be Toyota’s representative in Guangzhou. On arriving in Guangzhou, however, they discovered they would not be Toyota sales representatives at all but rather repair technicians at a domestic automotive manufacturer in the city.

The Chinese government has stated that graduate employment is one of its top priorities, and claims that the employment rate for graduates actually increased last year in spite of the economic downturn. “Last year, we pulled out all the stops to help college seniors find jobs and as a result the employment rate reached 87 percent by the end of 2009,” Yin Chengji, spokesman for the Ministry of Human Resources and Social Security, announced on 22 January. These figures were greeted with considerable skepticism by many academics in China, who said that students applying for graduate school or those starting their own business, etc had also been included in the employment figures.

But even if there really has been an increase in graduate employment, the figures cannot disguise the fact that many of those employed are being cheated and exploited by their employers. If the government really is serious about the welfare of China’s graduates, it should include them within the scope of the country’s labour laws, and, even more importantly, ensure that those laws are rigorously enforced.