Young Chinese people returning from studying overseas and lacking in work experience are likely to earn a starting salary similar to those of graduates from domestic universities, because of white-hot competition in the job market, a recent survey showed.

That's according to a report released on Tuesday by the Education International Cooperation Group (EICG), a consultative agency for study overseas.

The report shows that graduates returning from foreign study earn an average starting salary of 3,000 yuan ($472) a month. And more than 70 percent of them return to China following graduation.

As many as 7,000 returnees responded to the survey. Only 18 percent of them are earning more than 10,000 yuan a month, a 50 percent decline compared with 2010, according to the report.

It said that the increasing number of returnees in recent years has resulted in competition for jobs becoming stiffer.

Statistics from the Ministry of Human Resources and Social Security show that 632,200 returnees were working in China by the end of 2010. That number is set to increase by more than 500,000 during the next five years.

Wen Dongmao, director of the Graduate School of Education at Peking University, said the employment prospects of returnees are not much better than those of domestic graduates, so it is not surprising that their starting salaries are similar.

Returnees who lack work experience suffer the most. About half of them do not have work experience overseas or in China, and most of them are unable to earn more than 5,000 yuan a month, the report said.

"Those returning without any work experience are ranked on a par with domestic graduates. That's because employers have a high regard for work experience rather than just the candidate's educational background," said Zhang Chao, manager of the Study Abroad department of the EICG.

Domestic graduates in large cities, such as Beijing and Shanghai, also have a starting salary of around 3,000 yuan a month, according to Zhaopin.com, one of China's largest providers of human resource services.

Some returnees said that studying abroad is no guarantee of a higher salary.

"My salary is no different from that of my colleagues who graduated from local universities," said Li Yanjiao, "but I spent much more on studying overseas."

Li, who works for a private accountancy firm in Beijing and has been earning 4,000 yuan a month since March, spent about 400,000 yuan to study in a postgraduate program at an Australian university.

The EICG report shows that 66 percent of respondents said their overseas education is likely to be positive to their career.

"The experience of studying overseas is likely to give me more than just my current salary," said Xu Zhi, who works for an advertising agency in Guangzhou.

She said the experience of studying in the US last year will definitely help her prospects, although currently her pretax salary is about 3,000 yuan a month.

The advantage of studying overseas will gradually become more apparent as the returnees gain more work experience, said Zhang Chao, pointing out that they have an international perspective and the ability to communicate across different cultures.

Private enterprise is the main sector employing returnees this year. The EICG report shows that 46 percent of respondents work in private enterprises, while 32 percent work for foreign-owned enterprises or joint ventures.

"This trend bodes well for the successful development of private enterprises," Zhao said.

The report also shows that large cities such as Beijing and Shanghai are the most attractive destinations for those returning from abroad.