This study sheds light on the 「hard job-hunting」 issue of college grads in China through a new perspective. The less developed services industry is the main reason that creates insufficient jobs to employ grads. In general, college grads are going to flow into services industry. In transitional China, however, most service sectors are dominated by state-owned enterprises (SOEs) and controlled by administrative fiats. Moreover, services industry is a 「contract-intensive industry」 which requires rule of law to protect contract implementation. But, China lacks sound law environment to uphold the development services industry. In short, the monopoly of SOEs and unsound law system suffocate the growth of services industry and thereby creates fewer job openings.
