The Government Work Report on Sunday gave priority to ensuring stable growth and employment, and vowed to create about 12 million urban jobs in 2023.

The number of students graduating from college has been rising by the year in recent times — about 8.74 million in 2020, 9.09 million in 2021 and 10.76 million in 2022, and is expected to reach 11.58 million this year. Add to that the increasing number of overseas students returning home every year, the damaging impacts of the pandemic and the tough financial situation at home and abroad and you get an idea of the immense pressure the labor market is under.

China's National Bureau of Statistics started issuing annual urban unemployment figures in 2018, and data show the unemployment rate of people aged between 16 and 24 has been relatively high in recent years. In fact, the unemployment rate increased sharply last year due to cyclical, frictional and structural factors, peaking at 19.9 percent in July and falling to 17.3 percent in January 2023.

And the record 11.58 million students expected to graduate from college this year, along with the youths who graduated last year or earlier but could not land a job, may find it even more difficult to get employment in the current situation. Worse, it is hard to determine the side effects of online classes over the past three years on students. Perhaps online teaching has made some graduates incapable of meeting the demands of enterprises and other organizations.

Since college graduates are high-quality labor force, their underemployment or long-term unemployment will affect socioeconomic development, and the isolation of graduates from the labor market for long will have a negative impact on the accumulation of human capital and long-term career development of graduates.

China's manufacturing is at a crucial stage of transition and upgrading. As the development of an industrialized society and building of an innovative economy desperately require skilled workers, long-term labor shortage will hinder economic development.

The current misalignment in labor supply and demand is the result of mid- to long-term structural contradiction and the cyclical challenge caused by the COVID-19 pandemic, despite the compulsory education system and continuously rising number of students in higher education helping accumulate human capital and laying a solid foundation for China's rapid economic development.

Besides, the higher education reform needs to be intensified and the education system further improved so that it can produce college graduates that can meet the demands of economic development and the rapidly changing labor market. The top priority of labor market policies is to match the supply and demand of graduates and creative talents.

Accordingly, policies should be adopted to stimulate market entities, while graduates should display more flexibility in their choice of jobs. This is important because many graduates pursue postgraduate degrees or look for jobs in government departments or State-owned enterprises, which obstructs the effective allocation of human capital and other resources, and the development of the labor market.

Also, graduates should lower their expectations for their first job while dedicating more time to long-term career planning. Many even need to face the truth that their skills and qualifications do not match the requirements of the job they are seeking.

While enterprises should be given incentives to promote innovation, effective macroeconomic policies should be implemented to create more jobs and facilitate high-quality employment. For example, efforts should be made to provide subsidies for graduates, optimize human capital accumulation and promote skills training to guide youngsters to make career plans.

Enterprises should also be made to understand the advantages of offering subsidies, skills training and internship to graduates, because they can help the development of the enterprises too.

Moreover, an employment "buffer zone" should be created to make sure short-term unemployment problems do not become long-term structural unemployment problems, and provide services such as study programs, libraries and employment guidance to help graduates adapt to the changing labor market or pursue higher education.

And the authorities should make provisions to ensure that graduates receive proper psychological counseling and are encouraged to think about bright career prospects to prevent them from slipping into depression. Graduates who cannot easily find a job need to understand that the job market is facing some serious challenges, but China with the help of effective policies will eventually overcome the problem.

The author is a researcher at the Institute of Population and Labor Economics at the Chinese Academy of Social Sciences. The views don't necessarily reflect those of China Daily.

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