China looks to spur job prospects for record number of new graduates

© Reuters. FILE PHOTO: Job seekers wearing face masks fill in forms at the Wan Chai Job Fair, following the coronavirus disease (COVID-19) outbreak, in Hong Kong, China October 29, 2020. REUTERS/Tyrone Siu

BEIJING (Reuters) -China will offer subsidies, tax breaks and easier loans to boost prospects for college graduates, the cabinet said on Friday, as a record number prepare to enter the workforce this year amid downside risks to economic growth stemming from COVID-19 curbs.

The subsidies are aimed at small firms, while graduates launching start-ups stand to get tax breaks, easier loan terms and even rent-free premises, the general office of the State Council, or cabinet, said in a notice.

"China ... encourages employers in COVID-hit regions to sign labour contracts with college graduates online," it said, promising support for smaller and medium-size enterprises that hire more college graduates.

China wants to promote healthy development of the online platform economy, it added, referring to a sector that is a big source of jobs, crucial at a time when a record 10.76 million are set to finish college this year.

"'Red lights' and 'green lights' will be set up in order to promote healthy development of the platform economy and drive more jobs," the notice said, referring to a system of incentives.

But the worst COVID-19 outbreaks since 2020 have added to the pressures students face, and put at risk the small firms that are a mainstay of the world's second largest economy.

China's "dynamic clearance" policy against the Omicron variant of coronavirus has led to full or partial lockdowns in dozens of cities, including a six-week halt citywide in the commercial centre of Shanghai.

Small businesses, in particular, suffered in the accompanying disruptions to services and logistics.

China wants to add more than 11 million urban jobs this year, rising to as many as 13 million, Premier Li Keqiang said in March. But recently he has called the employment situation "complicated and grim."

Li added, "Stabilising employment is critical to people's livelihood, and is the key support for the economy to operate within a reasonable range," in remarks prepared for a teleconference with provincial leaders on Saturday.

China's surveyed urban jobless rate hit its highest in nearly two years in March at 5.8%, while the rate for job seekers aged between 16 and 24 reached 16.0%, the highest since July 2021, official data showed.

Policymakers should aim to get the labour market back on track to keep the economy growing, even if the annual GDP growth target could be hard to meet, analyst Julian Evans-Pritchard, of Capital Economics, said in a note on Thursday.