A girl read the book before exam in front of examination building for Postgraduates in Shandong Province, on Saturday, January 10, 2009, the first day of the annual National Entrance Examination for Postgraduates. A total of 1.246 million examinees sit for the exam this year. Facing the job seeking pressure, a lot of graduates choose to continue their study in school, so some of college students choose to continue their master degree. [Photo: China Foto Press]

The two-day exam, which determines who gets to go to grad school and who doesn't, began Saturday.

About 1.25 million Chinese are competing for hundreds of thousands of openings. More than half, won't be able to continue their education.

"Half of my classmates are taking the postgraduate entrance exam," said a student surnamed Xu, who is in her last year at Anhui University, a provincial college in eastern Anhui Province.

Xu, refusing to give her full name, is taking the exam as well and planned to apply for postgraduate courses at the History Department of Shanghai-based Fudan University.

The number of registered participants in this year's exam increased by 4.1 percent from the 1.2 million last year. Some are trying to avoid the bleak employment market by extending their education.

"It is not very easy to find a job even with a master's degree, without one will be even tougher. Many employers just did not want a college graduate," Xu said. "In addition, the employment market may be better in next two years."

China began expanding its university recruitment in 1999. It is expected to hit 6.1 million this summer, 10.9 percent more than last year, according to the Ministry of Human Resources and Social Security.

Just when the number of educated job seekers increased, employers were offering fewer jobs, especially in industries at the front line of the global financial crisis.

According to a Dec. 2008 report from www.51job.com, a job seeking website, the number of jobs at banks and security firms dropped by 12 percent between July-December. In the third quarter last year, openings at real estate companies reduced 6 percent from the second quarter.

"Much fewer small and medium firms, which used to take in many graduates, came to the campus to recruit graduates," said Wang Er'xin, official with the employment service office of the Guangzhou-based Sun Yat-sen University.

Postgraduates are also having problems finding jobs.

"This year is not good. At this time in previous years, half of the students would get offers but now many are still waiting," said Wang Hongjun, a postgraduate student who majored in political economics at Beijing-based Renmin University.

Students who majored in economics, finance and commerce were the most affected, he said. "We used to be the most popular."

In a survey covering about 1,300 expectant graduates in 20 universities in Shanghai, conducted by the local education authority, about 60 percent said they will be flexible about salary. Another 20 percent said they had already lowered their expectations about pay.

The Chinese government launched several policies to help college graduates find jobs, including encouraging them to work in rural areas or join the army.

At a meeting on Wednesday, the State Council promised to offer subsidies and social insurance to graduates who work in villages and urban communities, and help those who work in remote areas or join the army to repay student loans.

It also encouraged graduates to start businesses, with favorable tax and loan policies.

All of which could be useful to students who find out their test scores in March.