More than 1.5m applicants will sit China’s civil service exam next month, raising concerns about a jobs market that has come under immense pressure from the coronavirus pandemic.

The State Administration of Civil Service said that 1.6m people, the second-highest in history, passed background checks for the national public servants exam scheduled for November, up from 1.4m in 2019. Only 1.6% of applicants will eventually secure a position.

The growing popularity of government jobs highlights the challenges faced by China’s labour market as employers cut back on hiring, driving the jobless rate to above pre-virus levels despite a recovering economy.

“At a time of massive job losses,” said Bo Zhuang, an analyst at TS Lombard, a consultancy, “government agencies are the best places to work given the iron rice bowl it provides”.

China’s official unemployment rate stood at 5.4 per cent in September, compared with about 5 per cent before the pandemic struck. For this year’s 8.7m college graduates, prospects on the jobs market are grim. According to some university career service offices, only 25 per cent of their graduates from the class of 2020 have found a job.

Against that background, government bodies, known for their long-term employment, have become even more appealing.

“I want to work for a place that won’t lay me off at the age of 40,” said David Li, a former economic analyst who lost his job this year. Mr Li, 31, plans to apply for a research position at Jiangsu Provincial Finance Bureau.

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Government positions are not just secure. China’s state control of economic resources has allowed official agencies to offer above-average salaries plus lucrative benefits, ranging from housing allowances to subsidised pension plans.

Most private companies, the nation’s biggest employer, cannot match such lucrative packages as they struggle with stiff local and international competition and a cooling economy.

In the eastern city of Suzhou, one of the nation’s richest, government employees made an average of Rmb180,227 in 2018, compared with Rmb58,333 for private company workers, according to the local statistical bureau.

“Government jobs won’t make you rich,” said Tom Shi, a district official in Shanghai, “but they are enough to give you a comfortable life.” Mr Shi, who makes Rmb18,000 ($2,680) a month, lives in a 150 sq m apartment in the suburbs.

The rewards and security of a government job have made the civil service exam immensely competitive. The demanding test involves everything from policy analysis to maths quizzes and reading comprehensions.

The more popular jobs can attract thousands of applicants. The most coveted position this year — a staffer at the National Bureau of Statistics in the Dongguan branch — has drawn 3,334 job seekers.

“You need to be ready to compete with the brightest minds in the country for government positions,” said Lucy Yan, a laid-off statistical analyst who is planning to apply for a research role at Zhejiang provincial government.

The exam boom, however, has raised concerns over a misallocation of human resources. Analysts said the influx of talents into public service threatened a skills shortage in the private sector, which drives economic growth.

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“The current system has discouraged capable people from entering areas where they can make the most of their talents,” said Mr Zhuang.

Last week, official data showed that China’s economy expanded 4.9 per cent year on year in the third quarter, at a time when global growth remains under pressure.

Additional reporting by Thomas Hale in Hong Kong

Via Financial Times