China is facing a very severe unemployment problem, says Labour Minister Tian Chengping.
The Chinese Labour Minister is calling for better training
He said 20 million new workers entered the labour market each year, chasing only 12 million jobs.
He said employers were complaining about a lack of skilled workers and China had to provide more training.
Speaking on the sidelines of the annual National People's Congress in Beijing, Mr Tian said the aim was to keep urban unemployment at or below 4.5%.
China is aiming to create 10 million new jobs this year and find work for 5m sacked workers, he added.
Correspondents say China's unemployment figures tend to understate the situation as they only cover the urban jobless.
Economic growth in China was more than 11% last year, but there are fears that a downturn in the United States could affect exports and job creation.
The authorities also face pressure from large numbers of university graduates entering the job market.
Some employers have said new labour legislation is worsening the problem as it is too restrictive and hampers job creation.
Mr Tian rejected this. "One can have expanding employment and a good investment environment alongside protection for workers and harmonious labour relations," he said.
The new legislation makes it easier for workers to obtain continuing contracts and also requires companies to contribute more to pension and insurance funds.
The laws were brought in after complaints about the treatment of workers including reports of wages going unpaid.