Small businesses in China are offered monthly subsidies provided that they employ local graduates from Shanghai. The new policy aims to promote employment as well as ease the soaring unemployment rate in the country.
According to the Shanghai Human Resources and Social Securities Bureau, monthly social insurance payment subsidies amounting to 520 yuan ($85) will be provided for small- and micro-sized enterprises that opt to hire graduates from their own country.
The implementation revealed that the said amount will be multiplied by the number of graduate employees the business chooses to employ with a contract lasting not less than one year.
Aside from this, the local government also offered college graduates subsidies to start their own businesses amounting to 630 yuan (about $103) per month over the course of two years as a means of supporting their beginning independence.
These local implementations are part of a State Council national circular passed in May in order to encourage student entrepreneurs as well as local graduate employment.
As of today, only graduates with a permanent residence permit in Shanghai, or those with a Shanghai hukou, are eligible to apply for the subsidy.
Though it does not necessarily indicate that the graduate should be fresh from college, the monthly subsidy scheme requires that it should be his or her first employment.
The bureau stated that applications for the project can be made at employment centers where the company and graduates pay their taxes.
Social insurance payments for qualified new employees in Shanghai include medical insurance, pension, maternity insurance, work-related injury insurance and unemployment insurance, while self-employed graduates' social subsidy covers only their medical insurance and pension.
As of latest records from the Shanghai Education Commission, 72 percent of the 175,600 graduates in 2014 in Shanghai have already accepted a job offer, enrolled to postgraduate studies or opted to venture abroad.
In all of China, the number of college graduates has escalated to 7.27 million this year, a new record based on most recent reports.