(Bloomberg) -- China is encouraging companies to boost hiring as the economic recovery gathers pace, underscoring persistent worries over the labor market and soaring unemployment among young people.

The State Council, China’s cabinet, published a detailed plan Wednesday to promote employment. Measures include expanding recruitment within state-owned enterprises, as well as providing subsidies to employers that recruit new graduates and young people who are struggling to find work. 

The emphasis on jobs comes as the urban unemployment rate for people aged 16 to 24 hit 19.6% last month, nearly as high as the record set last July. Fears about further pressure on that rate will likely continue in the coming months, given that some 11.58 million students are expected to graduate from universities and colleges this year. 

The State Council’s plan included a vow from authorities to ensure the size of public institutions — including Communist Party and government organizations — will remain stable. They urged those groups to use their existing headcount to hire graduates. 

The government also aims to have at least 1 million internship positions for young people, which the plan said can be achieved by providing subsidies to employers. 

Rising unemployment pressure in recent years — the result of a perfect storm of Covid Zero-fueled layoffs, along with the government’s regulatory crackdown that hit the private sector — led an increasing number of young people to lose faith in private companies and instead accept lower pay in the state sector. 

At the time time, the government has called on state firms to shoulder the responsibility of absorbing more workers. The number of college graduates hired by state-owned enterprises jumped 23.4% to over 760,000 in 2022 from a year earlier, officials said at a briefing Thursday.

The central government has also sought to streamline its bureaucracy, and is planning to cut the number of positions in its departments by 5%. It wants to redistribute those jobs into strategically important areas.

--With assistance from Xiao Zibang.

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