Chinese Youths Scramble For the 'Iron Rice Bowl' Amid Economic Slowdown

TMTPOST--"I just wanted a work-life balance, and living with my parents. Being a public servant was exactly my aspiration," Yang Shuang, a 24-year-old recent graduate from the law school of Peking University, told TMTPost. She now works in the government of a small county in Xiangxi Autonomous Prefecture in central China’s Hunan province.

"Besides, it has become increasingly difficult to find a well-paid job in big cities like Beijing and Shanghai after the pandemic, which has dampened my enthusiasm to pursue a career in a law firm from scratch. My diploma from one of China's top two universities has lost its past luster as well," she said in a low spirit.

Yang is not alone. A Stanford University graduate has returned to his remote hometown to take on a role as a civil servant. His move might seem unusual, but it's part of a broader trend where Chinese graduates from world-renowned institutions are choosing to work in local governments of their hometowns.

In March, a public notice released by Yuhang district in Hangzhou city, Zhejiang province in east China, showed that one of the candidates for a civil service position came from Harvard University, another prestigious institution.

As the labor market grapples with the influx of more and more fresh graduates, smaller cities and counties are increasingly becoming the best option for some, reflecting the reality of university graduatesadapting to a challenging job market.

However, some people shrugged it off, saying it is a huge waste for such talents to work as a public servant at a remote place. "Although it is an 'iron rice bowl' job, the 'food' in the 'bowl' is already 'spoiled'," 25-year-old Chen said jokingly. She works in a medical device company in Shanghai and earns 20,000 yuan (US$2,758) per month.

This trend of university graduates moving to lower-tier cities and predominantly rural counties has become increasingly prominent in recent years as China's heavily indebted municipalities grapple with worsening fiscal conditions. As a result, the so-called “iron rice bowl” of secure jobs at public sector or state-owned firms have started to crack in some less populous regions amid a scaling back of the civil service.

Institutional restructuring in Guzhang, the least populated county in Hunan province, could include merging various administrative departments and subsequently downsized staff.

"[The goal is to] optimize administrative service efficiency, reduce fiscal support pressures, and direct limited financial resources towards ensuring and improving people's livelihoods," said Shen Xiaoming, Secretary of the Hunan Provincial Committee of the Communist Party of China.

Despite its small population, Guzhang has a comprehensive administrative infrastructure and nearly 4% of residents are civil servants, much higher than the provincial average.

But as debt mounts without reliable sources of revenue, the county heavily relies on transfers and payments from higher-level authorities, mirroring the predicament faced by other small counties.

"Due to the downturn in the real estate sector and the national economy, local finances are facing significant difficulties, and everyone is considering what to do next," said Peng Peng, executive chairman of the Guangdong Society of Reform.

Excessive expenses on a wide range of areas further exacerbated the burden on public finances and the challenges of maintaining essential public services, the heavily-debted government lacks a solid basis for increasing borrowing, Peng added.

As governments are unlikely to make significant cuts in expenditure on essential public services, and while sustained investment growth is unlikely, "perhaps the only possibility is downsizing the government workforce by eliminating some redundant positions and unnecessary expenditures," he explained further.

In 2022, Hunan's outstanding local government debt accounted for 31.7% of its gross domestic product, higher than the national average of 29%, according to Everbright Securities.

A report published by financial news provider Caixin Media showed that some local governments are being forced to take out bank loans to pay public servants, while others are unable to make salary payments.

Provinces that received an increased quota of special-purpose bonds—used by cash-strapped local governments to raise funds, usually for large infrastructure construction projects—could also be required to cut public sector jobs by 20%, Caixin added.

Xu Tianchen, an economist with The Economist Intelligence Unit, said iron rice bowls could become less stable, with salaries and headcounts potentially reduced.

However, the streamlining of the public sector would not result in large-scale lay-offs, as "some people will be [taken care of] by early retirement, while others will be reassigned to lower levels of government departments."

"Working within the public sector may still offer stability, but the number of stable positions is likely to shrink, and compensation may decrease," Xu added.

A number of small counties in northwest Shanxi province, which took the lead in institutional reforms, have also been forced into changes.

The downsizing of local public services comes as debt-laden provinces cope with a prolonged property slump, which slashed land sales, as well as years of massive investments in infrastructure and the cost of the coronavirus screening and prevention.

In the first half of 2023, land sales—once a key source of revenue—fell by more than 20% to 1.87 trillion yuan (US$255 billion) in China.

As China's population continues to gravitate towards large cities and metropolitan clusters, many counties will face pressures for regional consolidation, organizational mergers, and downsizing, particularly those located far from major urban centers and lacking industrial foundations, Xu added.

On the level of the central government, China said in March 2023 that it would cut the number of positions within central government agencies by 5% over the next year, paving the way for new departments.

But civil service positions are still increasingly sought after, particularly among fresh graduates, who are faced with fewer opportunities, rising living costs and mounting uncertainties.

Nearly 2.6 million signed up for the 2023 national public servants exam, the highest in nearly a decade.

"I come from Shandong province, a province famous for taking exam to get on the government payroll. I aspire to become a public servant since childhood. So I began preparing for the exam after receiving the offer letter of a master program. Luckily, I passed the exam and joined a ministry of the central government," 29-year-old Xueya told TMTPost proudly, adding "I often work overtime during the past five years, despite a relatively low pay, I think the job gives me a great sense of honor and fulfillment, and it’s a plus in the matchmaking market."

But with only 37,100 positions available, in some cases, nearly 6,000 people would compete for one position.

"Many of my classmates choose to venture into big cities right after graduation. However, I followed the trend and took a civil service exam, returning to a small city, which is my hometown. Perhaps I'll soon lead a life where I can see myself turning 80. Will I be drifting further away from everyone? Is a job within the institution really suitable for me? I don’t even know what I truly want to do," Hu Bin, who just passed the civil servant exam at a town in Hubei province, asked herself.

"What will I be doing at 30? Can I be sure my job is still safe when I turn 30? The only option I can think of is becoming a civil servant," says Zhou Sisi, who graduated from a top-tier university in China.

Zhou passed both the Sichuan provincial exam and the Chengdu municipal civil service exam, ultimately choosing the city-level civil servant position with greater development potential.

"We work from 8:30 am to 5:30 pm. The job might not offer much prospect, but is very stable and we seldom work overtime," He Jingjing, who works at a township government in Hunan province, told TMTPost.

Xiao Tang, who graduated with a master's degree from an ordinary university this year, mentioned one of the biggest advantages of working in the government for women, "Women need maternity leave, which many private companies are reluctant to offer to female employees. Working within the system may alleviate some concerns." In the Chinese language, public sector jobs, including public servants, teachers, doctors and researchers, are also referred to as “working in the system.”

Compared to enterprises, jobs within the system are relatively stable, especially during the pandemic when layoffs and salary cuts became common. Additionally, in traditional Chinese societal views, civil servants have a higher social status and the job is considered quite 'decent', said a professor from a prestigious university.

Additionally, amid China's demographic shift of a new-birth tumble, a sharp drop in the number of preschools and primary schools could result in a reduced demand for teachers.

The number of primary schools in China dropped by 3.35% to 149,100 at the end of last year, while new enrollments sank by 4.55% to 17 million. According to calculations by Beijing Normal University, there will be a surplus of approximately 1.5 million primary school teachers and 370,000 middle school teachers nationwide by 2035.

"The economy is not doing well now, the [private] companies could all disappear, but as long as the government stands, we have bread on the table," said 27-year-old Wu, a teacher in Wuhan, the capital of the central Hubei province.

"Even in a small city like Jishou in an area which was just lifted out of poverty a few years ago, there are 200 to 300 candidates from all over China competing for one position of English teacher," 31-year-old Long, who works as a primary school teacher in Hunan province, told TMTPost.

"Senior high school students are scrambling to apply for majors related to agriculture, forestry, medical health and police, because there is a higher chance for students in these majors to land a ‘iron rice bowl’ job,” a high school teacher in Hunan province told TMTPost.

"Some students are even willing to settle for vocational schools to secure a position in these majors, even if their scores are high enough for a tier-1 colleges and universities. This is unimaginable years ago," the teacher lamented.

The idea of 'iron rice bowl', or a permanent position, can sometimes create an illusion, leading people to believe that it represents a stable lifestyle, sparing them from the need to worry about the rest of their life. However, certain positions may suppress personal ambition and blunt their professional abilities, which, in the end, will turn a talent into a mediocre person.

For some young people, they may indeed prefer the relatively tranquil and relaxed lifestyle of a small town, seeing it as their 'place of peace.' In such cases, they are undoubtedly well-suited to be introduced to the county as high-end talents.

If this is not the case, is it worthwhile to take a one-size-fits-all approach and force young individuals from diverse background onto the same path? This is a matter that merits serious consideration, especially by the young people themselves, said Huo Xiaoli, Delegate to the 14th National People's Congress.