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Are There Too Many PhD graduates become food delivery drivers in China?

James Huang | 2023.06.04

Contrary to popular belief, the issue is not an oversupply of PhDs in China, but rather a shortage. A comparison to developed countries shows that there is still room for growth in the number of PhDs in China. The lack of job opportunities for PhDs is not due to an oversupply of graduates, but rather the insufficient number of high-paying jobs available. China needs a significant increase in high-paying job opportunities, and these positions need to be made available to PhD graduates.

The current situation is that China lags behind developed countries in providing high-paying job opportunities. As a result, many PhD graduates have resorted to delivering food. The issue is not an oversupply of PhDs, but rather a lack of high-paying job opportunities.

The root of the problem is that China's consensus economy does not provide enough job opportunities. What is needed is a mature risk investment (VC) market, which is urgently required in China. However, the current state of the market is not mature enough to encourage investors to take part in risk investment.

The interest rate in the US will remain high for a considerable period of time, resulting in short-term returns being greater than long-term returns. This rare phenomenon will persist for some time, causing the global venture capital market to stagnate. It is unlikely that anyone will invest in venture capital on the international market under such conditions. The underdeveloped state of China's domestic risk investment market has been fully exposed as a result.

Many may wonder how software engineers could earn an annual salary of 2 million RMB. The answer is simple. When the stock market is good, Internet giants easily employ tens of thousands of people, each earning an annual salary of 2 million RMB. The money is provided by Wall Street.

The reason why domestic internet companies such as Alibaba and Tencent sought financing from foreign countries and went public abroad is that China's domestic risk investment market is not mature enough. It is difficult to obtain investments from wealthy Chinese individuals, who have instead invested in real estate.

The initial venture capital for many technological companies comes from foreign sources. This is because China's domestic risk investment market is not mature enough. As a result, many of these companies end up going public in the US.

The high salaries of research and development personnel, which can reach millions of RMB, are mainly provided by the venture capital market. Only the venture capital market can afford to pay high salaries to a large number of research and development personnel, allowing them to work with creativity and efficiency. This is why venture capital investors cast a wide net, allowing them to achieve an extremely high rate of return if they are able to discover a breakthrough product or service.

It is impossible for state-owned enterprises to engage in such activities anywhere in the world, as the risk of “losing state-owned assets” is too high for involved government officials.

The world's innovation is primarily driven by the venture capital market. Those PhD graduates earning annual salaries of 2 million RMB are paid by the venture capital market.

China has been investing in PhD education for over a decade, and these graduates are useful for upgrading industries and increasing the proportion of technological innovation.

China does not currently lack funding or talent, but rather a mature risk investment market that can pool funding and talent to create the next Elon Musk. The key is to guide and mature this VC market. With this, funds and talent can be stimulated, rather than watching PhD graduates become food delivery drivers.

China's education system has been expanding since the day it began increasing enrollment. The current situation demands a mature risk investment market within China, rather than putting pressure on educated individuals to abandon education and work as manual laborers.


When people do not know something, they have two choices: remain ignorant or seek knowledge. However, once a person knows something, they can no longer return to ignorance. This is a capacity - the ability to see the future, to anticipate, and to predict.

During our first entrepreneurial venture, we had a board chairman sent by the major shareholder, who was also a key partner and second-in-command of the group. At a dinner, he commented on one of his subordinates, a high-ranking executive who graduated from Tsinghua University with a PhD. He had been with the company for many years, serving as a team leader, department manager, general manager, and product line manager. However, he was blocked when it came to becoming a partner.

In his words, the individual was smart enough, but not "stupid" enough. Being smart is helpful for picking a big strawberry, but being stupid enough to give up that strawberry at the right time is necessary to progress to becoming the owner of the strawberry garden.

Smart horses are rare and only they can win prizes, but they cannot become stable owners. To be a stable owner, one must be the smart horse that is stupid enough. Once a horse becomes smart, it can no longer be stupid enough. This is a violation of human nature. However, if you do not violate human nature, you won't be able to cross the last hurdle. It's normal to be stuck, as there are so many smart and excellent people in the world who are also stuck under the glass ceiling.

Once people know something already, they can't go back to ignorance. Once people become smart, they can't be dumb enough again. This is China, and there is no turning back. There's no possibility that China can return to the 90s to manufacture shoes and socks, or to screw bolts in factories.

There is no turning back in this game. China cannot revert to the past and produce shoes, socks, or screw bolts in factories. Even if China wanted to, the Western world would not believe it.

Looking from the perspective of a per capita GDP of US$30,000, is it possible to not have a mature domestic venture capital market? Is it possible that just having a few PhDs is sufficient?

Are There Too Many PhD graduates become food delivery drivers in China?
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