Chinaʼs recent upsurge in graduate unemployment has specific causes relating to economic development, education policy-making, and reforms in the economy as well as in higher education. With a focus on graduate unemployment, this study looks at the historical and socio-economic conditions for Chinaʼs move to raise the level of participation in higher education, the rationale behind the 1999 decision to accelerate the pace of expansion in the tertiary education sector, and the impact of this rapid expansion on society, and on graduate employment in particular. Martin Trowʼs theory is adopted as a theoretical framework within which the dilemmas and challenges of Chinaʼs mass higher education movement are analysed. Through examining the relationship between the development of higher education and economic growth, this report questions whether Chinaʼs higher education sector should have expanded and continue to expand on such a large scale.