By Q. Forrest Zhang, For The Straits Times

NEXT month, the floodgates of China's universities will open, releasing six million graduates into a job market already depressed by the economic crisis. Many of them - some estimates put the figure at nearly 50 per cent - will join China's growing army of unemployed college graduates.

Given the economic downturn, this should come as no surprise. However, the sharp rise in graduate unemployment, which began a few years before the downturn, is puzzling in the light of China's declining birth rate. An over-supply of young college graduates is not something one would expect in a country believed to be facing a shrinking population.

Many point to the expansion of college admission that began in 1999 as the culprit. From 1993 to 1998, the annual number of college entrants in China rose from 920,000 to 1.08 million, an average annual increase of 2.8 per cent. But in 1999, the number jumped to 2.75 million. And in the years that followed, the number of college entrants continued to hit new heights, reaching six million last year.

This does not include the nearly two million students who take college-level adult education courses. For the 10-year period from 1999 to now, the expansion of China's tertiary education sector has resulted in an average annual growth rate of 12 per cent in student intake. The yearly cohort of college entrants now is over four times larger than that of a decade ago.

The expansion of tertiary education has led to another phenomenon unthinkable just 10 years ago: It is now easier to get into a college in China than into a high school. In 1999, the proportion of high-school graduates advancing to college jumped from 46 per cent to 64 per cent. It continued to rise until peaking at 84 per cent in 2002.

At the same time, the rate of middle- school graduates moving on to high school stagnated. In 2002, only 58 per cent of middle-school graduates went on to high school.

This trend has further exacerbated the increasingly unequal distribution of education opportunities between urban and rural areas.

From 1985 to 2004, the transition rate from middle school to high school grew from 40 per cent to 55 per cent in Chinese cities, but dropped from 22 per cent to 18 per cent in rural areas. From 1998 to 2002, the period of explosive growth in tertiary education, the number of rural high schools actually declined by 7 per cent. By 2002, China's rural areas contained 61 per cent of the country's population, but less than 50 per cent of its high schools.

As fewer students from rural middle schools advanced to high schools, the opportunities to enter colleges - almost all of which are located in cities - were mainly taken by urban teenagers.

These trends created two widely different employment paths. Rural youth typically end their formal education after graduating from middle school. The vast majority of these graduates (around 80 per cent in recent years) - as well as those who drop out of middle school - enter the labour market at around age 15.

The number who choose to stay in rural areas as farmers has declined steadily. Most move to cities to look for manufacturing or service jobs with minimal skill requirements.

Most urban youth, however, go on to high school. After graduation, 80 to 90 per cent of them progress to college. Thus, most urban youth enter the job market after obtaining some kind of tertiary education, at around age 22. If they move after graduating, it is almost always to another city, most likely bigger than the one they are in, and hardly ever to the countryside.

These two paths - and the bifurcated employment structure they create - are responsible for China's labour market woes.

On the one hand, tens of millions of migrant labourers who compete for low-end jobs are unleashed on the labour market each year. On the other hand, colleges churn out an increasing number of graduates who chase after coveted professional positions in cities, which are now growing at a much slower rate than they used to.

Ironically, many employers have a hard time finding qualified candidates. What they need is the group in the middle: high-school or vocational-school graduates who are willing to work in factories and can be trained to become skilled technicians.

The glut of college graduates could be eased if some of them moved to county- level cities, small towns and rural areas, many of which need them. But for these graduates, most of whom come from cities, crossing that giant rural-urban divide would be to defeat the purpose of having spent so much on a college education.

Rising graduate unemployment in China stems from more than a simple oversupply. It has more to do with the wide- scale misallocation of resources in the country's education system.

This article was first published in The Straits Times.