In a move to further encourage companies to hire more young people, the State Council has asked every city in China - except four - to drop the permanent residency requirement when hiring non-native college graduates.
In a recent document, the State Council has asked cities, except for Beijing, Shanghai, Tianjin and Chongqing, to lift hukou, or the residency permit restriction so that applicants can move almost anywhere for a job.
The document comes after a job stimulus package was unveiled in early January intended to help college students find jobs amid the economic slowdown.
"The Chinese job market is grim amid the global financial crisis and college graduates are facing huge pressure finding jobs," it said.
College graduates are a "valuable" human resource, and all local governments and all related departments should give top priority to the employment of college graduates with more innovative measures."
The document also says that labor-intensive small enterprises can receive up to 2 million yuan ($300,000) in loans if they employ a certain number of registered jobless urban residents.
The major State-owned enterprises and scientific research institutions were also urged to offer more jobs for graduates.
The State Council also encouraged college students to broaden their job search and consider working in grassroots communities, central and western parts of China or SMEs, or start their own business.
The self-employed graduates can get individual small loans of up to 50,000 yuan.
An earlier report by the Chinese Academy of Social Sciences said the unemployment rate among new graduates surpassed 12 percent at the end of 2008, and that 1.5 million were without work.
According to the Ministry of Human Resources and Social Security, 6.1 million fresh college graduates will enter the job market this year.
"The employment of college students should come first in the whole employment stimulus package," Zheng Gongcheng, the country's leading social security scholar and senior lawmaker, told China Daily.
He said college students and their families have invested lots of money in education with high expectations for a future career.
"If many college graduates cannot find proper jobs, it is a huge waste of social resources," Zheng said.
But most fresh job seekers want stimulus policies to be more concrete.
"I am not clear about the measures and I don't think they have much to do with me," Xu Baoxin, 22, a new graduate of Southeast University in Nanjing, Jiangsu province, said yesterday.
"They are too vague and the lifting of hukou restrictions may only be helpful for those who want to work in big cities," Xu said.
Another job seeker, Tang Jianye, said the stimulus policies are a little bit late and they need more employment related services.
"It (the policy) is late but it's better than nothing," the graduate from Jiangxi University of Finance and Economics said.
In another step to help graduates find jobs, Beijing municipal government plans to hire college graduates as community assistants, a new position created by the local government, in a bid to encourage them to work at grassroots level.