As per the latest news, thousands of state-owned enterprises, local governments, and public institutions from China are expanding their hiring as a record number of students graduate into the job market are left reeling by the COVID-19 pandemic.

Around 8.7 million Chinese students are graduating this year, which constitutes almost half a million more than last year who are heading into an uncertain future as private firms rein in recruitment.

Job stability for the young is a longstanding political concern in China. President Xi Jinping, who has previously warned that struggling graduates could “turn into negative energy,” is urging organizations to hire more.

Graduates, who generally enter the workforce in June or July, face a “severe” situation, officials said. Available positions for them in the recent pre-graduation spring recruiting season fell by 22% on year, according to BOSS Zhipin Research.

While China’s GDP bounced back into growth in the second quarter, surveyed unemployment of graduates aged between 20-24 was more than three times the rate for the broader population, rising to 19.3% in June, 2.1 percentage points higher than May.

In response to President Xi Jinping's request, Oil giant Sinopec Corp is doubling its 2020 recruitment numbers, with an additional 3,500 positions for new graduates.

In Henan province, provincial SOEs have been told to expand hiring and reserve at least half the new positions for graduates.

“Clearly, initiatives such as this run counter to the idea that China’s SOEs are run on a purely commercial basis,” said Louis Kuijs, of Oxford Economics. SOEs, which enjoy privileged access to certain sectors, have a “special responsibility” at times, he said.

Government schemes of sending young people to work in less developed areas of China have also been bulked up: one, where graduates help with poverty alleviation and other community support, has 5,000 more places than last year.

The efforts to directly soak up labor are limited as China’s private sector accounts for 80% of urban jobs. But SOEs have also been told to help employment indirectly by promptly paying and reducing costs for smaller companies, said Andrew Polk, a partner at Trivium China, a research advisory. SOEs have been pivotal in driving China’s supply-led economic recovery amid the pandemic, although demand has not kept up, Polk said.