By Laurie Chen

BEIJING (Reuters) – A record 3.4 million young Chinese flocked to the civil service exam this year, lured by the prospect of lifetime job security and perks including subsidised housing as an economic slowdown batters the private sector and youth unemployment remains high.

Applicant numbers, which surged by over 400,000 from last year and have tripled since 2014, reflect the huge demand for stability from disillusioned Gen Z Chinese and the lack of attractive options in the private sector even though local governments are struggling to pay wages due to a fiscal crisis.

Klaire, a master’s student in Beijing, took the notoriously competitive exam in early December, studying for nine hours a day and spending 980 yuan ($134) on online tutoring.

She cited social prestige and stability as major factors why she is only applying for government or state-owned enterprise (SOE) jobs. Klaire has also seen colleagues get laid off during a previous tech internship.

“I only want to pass the exam and not worry about what happens next,” said the 24-year-old, withholding her surname for privacy reasons.

“Despite personally knowing civil servants who haven’t been paid for months, I still applied because I don’t wish to make lots of money.”

If she passes the exam, she will have a further interview as well as political background and physical checks, with the final outcome expected around April.

Layoffs are rare in China’s civil service, earning it the “iron rice bowl” moniker, though individuals can be dismissed for disciplinary violations.

“The current leadership has no intent of reducing the size of public sector workers, who are the backbone of regime stability,” said Alfred Wu, associate professor at National University of Singapore.

Most civil service openings have an age limit of 35 and offer subsidised housing and social insurance, a major attraction for graduates disillusioned by the paucity of private sector job opportunities.

Youth unemployment rates, which fell slightly in recent months, remain elevated compared to pre-pandemic figures as China’s economy struggles to recover amid a prolonged property sector crisis and frail consumption.

Many Gen Z Chinese “feel a strong sense of burnout and don’t know what is meaningful” after having their university years defined by the pandemic and China’s economic slowdown, said a Chinese sociology professor on condition of anonymity.

As the present generation of Chinese graduates have not experienced the mass state sector layoffs of the 90s, many have an idealised view of government work, he said, noting an apt summation in a social media meme: “Becoming a civil servant is the endpoint of the universe”.

WAGE WOES

However, rare interviews with ten public sector employees across four Chinese provinces paint a different picture: widespread bonus reductions and pay cuts of up to 30% this year have prompted some to consider resigning, while local government austerity drives have led to sporadic staff cuts.

Some civil servants say they have been unpaid for months. Others survive on as little as 4,000 yuan ($550) monthly while supporting families and paying off loans. Many asked for anonymity to avoid retribution.

Despite these obvious woes, high nationwide youth unemployment has fed strong demand for civil service roles, which have surged from 2019’s 14,500 to 39,700 this year.

Katherine Lin quit her civil service job in the southern megacity of Shenzhen in July after her 15,000 yuan ($2000) salary dropped by a quarter, bonuses were scrapped, and managers hinted at further downsizing.

“Some departments chose to either cut salaries by 30% or fire people in response to cost-cutting policies,” she said. At least three Shenzhen district-level bureaux were merged and nine employees dismissed this year, public notices show.

In her housing bureau role, she handled an unprecedented number of migrant worker protests last December, when they normally demand wages before Chinese New Year.

Another civil servant in rural Guangdong province described his salary of 4,000 yuan ($550) as “stable poverty” after monthly bonuses of 1,000 yuan ($140) stopped in June.

In Shandong, civil servants complained on social media in September about being paid only one month per quarter, part of a policy called “guarantee four (months’ salary), strive for six”.

The State Council and Shenzhen government did not reply to faxed requests for comment.

DOWNSIZING PRESSURE

Beijing has long faced calls to reform its bloated state sector. Despite repeated downsizing campaigns, China’s civil service jobs swelled from 6.9 million in 2010 to 8 million currently, with at least a further 31 million public employees such as school and hospital workers who have fewer employment protections than civil servants.

Chinese provinces have quietly cut tens of thousands of public sector positions since 2020, mostly through hiring reductions and attrition.

Wage arrears are “systematic and universal across the country, and are impossible to solve substantially in the short term,” said a governance professor at an elite Chinese university on condition of anonymity, adding that this could increase corruption as officials supplement their salaries through tips and bribes, as well as increased administrative fines for citizens.

“The most pressing issue now is social stability,” said the professor. “Therefore the lesser of two evils will cause the expansion of civil service hiring and the neglect of institutional reform.”