To create more jobs, the government will make full use of the role of the service sector, labor-intensive industries, small and medium-sized enterprises, and the non-public sector of the economy, said Chinese Premier Wen Jiabao at the opening of the Chinese parliament's annual session.

    "We will do everything in our power to stimulate employment," said Wen when delivering the government work report.

    He said priority will be given to finding jobs for university graduates and migrant workers.

    The two groups are the hardest hit as the deepening global financial crisis dented job demand in the world's fastest-expanding economy.

    The government will offer social security benefits and position subsidies for college graduates who take jobs in public administration and public services at the community level, he told the country's legislators.

    Wen said graduates who either take jobs in villages or enlist in the army will receive tuition reimbursement and have their student loans forgiven.

    Institutions of higher learning, research institutes and enterprises undertaking key research projects will be encouraged to recruit qualified university graduates to do research work.

    To help graduates start their own businesses, the government will speed up the establishment of startups industrial parks and incubation bases that require less investment and yield quicker results.

    Meanwhile, China will boost government investment and launch major projects to employ more migrant workers, said Wen.

    Enterprises in a difficult situation will be encouraged to prevent layoffs by renegotiating wage levels with their employees, adopting flexible employment and work hours, or providing on-job training for them.

    The government will also increase the export of organized labor services and guide the orderly flow of rural migrant workers, Wen noted.

    With its annual growth slowing to a seven-year low of 9 percent last year, China has seen about 20 million out of 130 million migrant workers returning to their rural homes without jobs.

    In addition, there will be 7.1 million college graduates seeking vacancies this year, including 1 million who failed to secure jobs last year.

    China is yet to see the worst employment situation while its economy has shown signs of recovery, as the rebound of job creation is usually behind economic turnaround, said Li Yining, a leading Chinese economist with Peking University.

    "The economy usually demand less labor after experiencing a crisis because it will see improved technologies, equipment and productivity," said Li, also a member of the 11th National Committee of the Chinese People's Political Consultative Conference (CPPCC), the nation's top political advisory body.

    The urban unemployment rate rose to 4.2 percent at the end of 2008, up 0.2 percentage point year-on-year.

    China aims to keep its registered jobless rate below 4.6 percent and provide 9 million new urban jobs this year.

    "It's not an easy target, but the country is actively finding ways to make it happen," said Li.

    Li noted that while China should develop capital- and technology-intensive industries for the long-term growth, special aid should be given to labor-intensive companies to meet the urgent need of boosting employment.

    He called for reforms to give fair treatment and easier market access to private enterprises, which can absorb a large part of labor force.

    Labor oversupply will continue to exist in China in a long period and can only be solved by stronger domestic demand and faster industrial restructuring, said Cai Fang, head of the Institute of Population and Labor Economics, the Chinese Academy of Social Sciences.