The Chinese government's decision to scrap free tuition for postgraduate studies – including masters degrees and PhDs – is driving more graduating students to enter the job market instead of remaining in higher education. The trend is likely to intensify the graduate unemployment problem in the country this year.

The government has also this year removed the age cap on students in postgraduate studies, which was previously limited to students under the age of 40. Even so, the total number of postgraduate applicants this year is down by 40,000 compared to 2013, based on the number of students who took the national graduate school entrance examination in January.

Beijing institutions are already seeing more applicants for their professionally oriented graduate programmes – 38.3 percent of all postgraduate applicants, compared to 14.3 percent in 2010 – an indication that graduates are looking to enhance job prospects rather than undertake postgraduate degrees as a matter of course.

In 2012, 17.5 percent of graduates continued their studies at a university in China and 7 percent went to a university abroad, according to a survey of 52,000 students nationwide by online recruitment company Zhaopin.com. This had dropped to 14.5 percent continuing at a Chinese university and 5.4 percent going abroad, in Zhaopin.com's latest annual survey carried out in April 2014.

Students may also have been dissuaded by reports that postgraduate qualifications do not necessary give candidates an advantage in the jobs market. Education ministry statistics in 2012, which dictated the current rule changes, showed that the employment rate of postgraduate students was lower than that of graduates for several consecutive years, indicating a possible glut in the postgraduate market.