"Currently, the employment situation is critical, and this impact (of the financial crisis) is still unfolding," Yin Weimin, China's social security minister, told reporters in response to a question on recent labour unrest.

"We have called on all levels...to place priority on the stabilisation of the employment situation."

Yin announced a series of measures to try and stave off unemployment and to help those that have lost their jobs, particularly among China's 230 million rural workers.

He warned that the impact of the global economic turndown would be felt the hardest in the first quarter of 2009.

"Up until now, there have been no large-scale layoffs or any wave of rural migrant workers returning home," Yin said.

"(But) the number of rural migrant workers returning home is gradually increasing so we are watching this very closely."

With up to 24 million people seeking jobs in China every year, the government was hard pressed to fulfill its goal of seeing the creation of 12 million new jobs annually, he added.

Yin said joblessness had been most acute in China's coastal provinces, the nation's export-oriented manufacturing heartland, as light industry and textile companies closed, went bankrupt or stopped work.

Thousands of workers in those regions have already gathered in recent weeks outside shuttered factories, demanding unpaid wages.

Yin said the government would provide financial aid to companies to help them maintain employment, especially in the light industrial sector which employs up to 40 million Chinese.

"We will actively help enterprises overcome the current difficulties because this is very crucial to stabilising the employment situation," Yin said.

A four trillion yuan (586 billion dollar) three-year economic stimulus package announced earlier this month by the central government would also aid in creating jobs, he said.

Zhang Xiaojian, vice minister of social security, said China's unemployment rate stood at four percent, and that the government expected to remain within its target of 4.5 percent by the end of the year.

"But next year the registered (official) unemployment rate will certainly increase," Zhang said.

The national rate is also a vast underestimate because it does not include the 230 million rural workers.

Yin said a new system to incorporate them into the nation's overall employment picture was currently on the drawing board.

Zhang also warned the government would face difficulties in finding employment for the nation's educated youth, with over six million expected to graduate from college next year.

"If the job demand at enterprises falls, then the job situation for graduates will be very tight," Zhang said.

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