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

The country aims to keep its registered jobless rate below 4.6 percent and provide 9 million new urban jobs this year, according to Wen's report.

"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 (CASS).

College graduates

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, Wen told the 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 startup industrial parks and incubation bases that require less investment and yield quicker results.

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

Chen Guangjin, a CASS employment expert, said the jobless rate among college graduates have exceeded 12 percent, about three times the registered urban unemployment rate.

The problem was caused by not only the financial crisis but also the government's expansion of higher education coverage, he said.

Some legislators urged college graduates to lower their job expectations and go to work in grassroots units and the less developed western regions.