Since 2003, Chinese university students have faced a dangerous level of unemployment after graduation. Current trends indicate that the situation is likely to remain at this level for some time. This article argues that it is difficult to generalize that there has been a decline in the competitiveness of all university students in the job market and that they all face serious employment difficulties, because there is a rather significant difference in competitiveness among graduates from different types of institutions. Exploring the issue by applying human capital theory and screening theory in analyzing statistical data on the employment of university graduates, this research suggests that the most competitive graduates are likely to be those from economically developed areas who are studying at elite institutions. For university graduates, the ability to find a job does not necessarily mean being competitive. Taking into account the inequities in the education system overall, most students getting into these elite schools come from families with higher social class backgrounds, indicating an important relationship between competitiveness and various ascribed factors. This article argues that, when comparing the competitiveness of Chinese university students with that of their peers from other regions of the world, one cannot ignore social backgrounds. (Contains 1 note, 1 table and 7 figures.)