Johnson Yang had ticked just about every box on the long list to achieve his dream career when he made the decision to walk away.

The 26-year-old Chinese student was in his final year of a postgraduate law degree at one of China’s most prestigious universities.

In June last year, he secured an internship at a law firm in Shanghai, China’s wealthiest city where many global top 500 companies reside.

But Yang soon realised the legal profession wasn’t as glamorous as he expected — even as an intern, he was frequently rostered to work overtime, with little pay. It was stressful and tiring.

He also began to worry about whether he would be able to land a job in the competitive legal sector, alongside 11 million university graduates entering the job market.

In July — while Yang was still completing his internship in Shanghai — China recorded an unemployment rate of 21.3 per cent among those aged 16 to 24, before Beijing paused publishing its figures for the rest of 2023. 

The latest government data published in January showed an improvement, to 14.9 per cent. However, that figure doesn’t take the student population into account, and many young people in rural areas are also excluded. 

The tough situation prompted Yang to rethink his future.

“I want to consider other alternative career pathways,” he said.

So, like 3 million other young people struggling to navigate China’s declining economic prospects, Yang looked to government jobs, a career pathway that’s also popular among young Australians for its financial stability.

But experts warn the shift from private to public sectors among China’s youngest workers could come with consequences for the economy, while Australia’s multi-billion-dollar higher education industry could reap the benefits.

The ‘iron rice bowl’ is no longer for life

In recent years, jobs in China’s government and public sector have been described as “the iron rice bowl”, meaning they are jobs for life.

The term was first used to refer to jobs in China’s state-owned enterprises prior to the 1970s, at a time when the country’s economy was still structured around the Communist model of government. 

During this time, state-owned enterprises were dominant and workers generally kept their jobs for life with stable incomes.

In the 1980s, in the wake of low productivity and a growing economic crisis, the Chinese Communist Party launched a reform, embracing market economy.

It trimmed down the number and size of the country’s state-owned enterprises, while launching new policies to boost private sector and foreign investments.

The reforms laid the foundation for China’s rapid economic growth, but also led to a huge unemployment wave among state-owned enterprise workers in the 1990s.

The term “iron rice bowl” grew to include jobs in government and public sector, as many people believed these were more stable and safer careers.

But with the rapid development of the corporate and private sectors, the new iron rice bowl no longer dominates China’s economy.

Government data shows that in 2023, more than 90 per cent of China’s corporations were privately owned. The sector hired more than 80 per cent of labourers in urban areas, including almost half of the university graduates.

The private sector contributed more than 50 per cent of taxes and 60 per cent of China’s GDP. 

Nevertheless, there has been a rise in Chinese university graduates applying for government jobs in the past four decades.

But it’s not easy to get a foot in the door in the public sector.

The long road to becoming a public servant

In China, there are two main pathways for those who want to become a public servant: direct recruitment and exams.

Direct recruitments are only available for low-level governments and public institutions, so many young people tend to apply for public jobs through the exam system, which generally provides more future promotion opportunities.

Before they start studying for the public service exams, prospective workers must first apply to sit the test.

These exams test general education to around a Year 9 level, plus specialist university knowledge relevant to the position and department applicants are hoping to work in, such as accounting.

Applicants are also tested on political theories related to Xi Jinping’s leadership of the Chinese Communist Party. 

Despite the assessment level, the high demand for public service jobs — as many as 6,000 applicants for one job — means many young people commit to long-term preparation to achieve high scores in the exams.

Yang spent eight hours a day for four months revising before he sat the annual exam in November.

“Knowing how to answer the questions isn’t enough, you also have to answer all of them at a fast pace,” he said.

“There are lots of questions to answer, you have to complete one every 20 to 40 seconds.”

As part of his preparation, Yang watched online lectures and did mock tests, while many applicants also choose to take specialist tutoring for the exams.

According to a report in 2020, the annual profit for public service exam tutoring reached $2.59 billion.

Despite the drills and efforts, Yang didn’t progress to the next round of public service exams.

“It’s certainly not a good thing that so many young people look for jobs in the public sector,” he said.

Yang believes the lack of confidence in China’s economy has turned young people away from working in other sectors.

“Everyone is now trying to get into public services, because if we get in, then we at least don’t need to worry about losing jobs five or 10 years later, or having a middle-age career crisis,” he said.

China’s economy may be at further risk

The rapid growth of applications to public service jobs is a result of China’s economic slowdown since the pandemic, according to Yasheng Huang, an economist at the Massachusetts Institute of Technology.

“That’s a result of the policy choices that Chinese leadership has made: cracking down on the private sector during COVID; resorting to very strict controls of the population; [the] deterioration of relationship with the West; and the securitisation of policy,” Professor Huang said.