Higher education institutions saw student numbers hit 23 million last year, the highest in the world, an executive meeting of the State Council presided over by Premier Wen Jiabao heard on Wednesday.

Last year, colleges and universities enrolled 5.04 million students, 4.7 times more than in 1998.

However, they still faced problems of out-dated teaching methods, insufficient funding and a surplus number of graduates looking for jobs.

State councilors agreed it was necessary to control the increase of enrollment so that adequate funds could be allocated, teaching conditions improved, subjects and majors adjusted, and skills training reformed among other measures.

The scale of enrollment should be fixed in accordance with local conditions and controlled at a stable level, while education of high school graduates and occupational training should be strengthened.

In addition, occupational and adult education needed to be boosted to ensure more access to higher education.

The councilors also required strict regulation of the management of universities and prohibition of excessive fees in higher education.

China will face serious difficulties during the next two quarters with 60 percent of new graduates facing unemployment, according to a report published by the National Development and Reform Commission.

The number of graduates will increase by 22 percent over the previous year to 4.13 million while the job market can only soak up 1.66 million, down 22 percent on the previous year.

The level of surplus labor this year will reach 14 million, around one million more than last year, the report said.