China's top think tank, the Chinese Academy of Social Sciences, or CASS, has published a Social Blue Paper, saying the country will be confronted with even tougher employment challenges next year.

In 2009, the number of college graduates will reach an all time high at about 6 million, an increase of 500,000 from this year.

Li Peilin is an expert with the CASS.

"By the end of the year, there will be nearly 1 and a half million unemployed college graduates in China. We are working on measures to help some of them out of the difficult situation."

Suffering the impact of the global financial crisis, many small and medium-sized enterprises in coastal regions have closed down, driving groups of migrant workers back to the villages and towns.

With a slower economic growth rate and increasing labor costs expected in 2009, experts warn the situation could get worse.

Li Wei is another expert with the Academy.

"For migrant workers, the most important thing is to improve their technological skills and overall competence. Many are still labor workers or involved in the primary processing industry, and this will do no good to their future development."

Li Wei encouraged college graduates to start their own business, saying they could acquire better knowledge, more opportunities and richer life experience.