“These companies are looking for employees, and I have a degree,” says the 22-year-old computer major, clutching a plastic organizer stuffed with résumés, business cards and company information. “I don’t know what I’m doing wrong.”

That paragraph might be written by just about anyone, in any country, at any time in the last thirty years. But it’s this specific moment and country that surprises:

Unemployed university graduates used to be rare in China. But now their ranks are ballooning to critical levels just as the country suffers its worst economic slump in two decades. Up to one-third of last year’s 5.6 million university graduates are still looking for work, and this year will see another 6.1 million hit the labor market.

China has raised its enrollment to universities in recent years, looking to provide advanced skills for an economy becoming rapidly more sophisticated. Ironically, it has a looming talent crunch. Even more ironically, university education may not be helping provide talent.

“There is a misalignment between the university system and the needs of the economy,” says Robert Ubell, who heads a New York University program in China to train young Chinese employees of foreign companies. “Chinese graduates often have few practical skills.”

Competitive Futures has done voluminous work around the future of the talent crunch, and a theme that often comes up is the paradox that we might have unemployed people with lots of expensive education, and still be missing key talent. It may not be all that mysterious. Our educational institutions are institutions first, education second. They have more in common with Henry Ford’s assembly lines that of classical education received while at the knee of some philosopher, or even apprenticeship – direct, useful knowledge. Reality moves faster than institutions. We have become very good at producing degrees, but not necessarily better at moving people into the areas of hydraulic engineering, geriatric medicine, forensic accounting – skill sets about to be abandoned as the Boom generation retires, and as the Little Emperors take over from the Mao generation.

Somewhere, we are going to have to meet in the middle. It will bypass irony and go straight to comedy when we have a massive need for critical skills and millions of college kids out of work. Surely, we will be able to accomplish something out of that mess – the raw ingredients are there.

The tension will be between universities and employers. Universities, at least in America, are charging increasingly ludicrous sums for their services, and employers are decrying the lack of basic skills. We may go back to “on the job training” and forego the barbaric practice of saddling our children with hundred of thousands in debt – the 21st version of indentured servitude. Employers may decide they can do a better, cheaper, more humane job.