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

Mr Yin announced a series of measures to try to stave off unemployment - predicted to rise next year - and to help those who have lost their jobs, particularly among the more than 200 million rural migrant workers.

The trouble has been most acute in southern Guangdong province, China's manufacturing heartland, where one-fifth of factories in major cities are expected to close by January alone, according to industry estimates.

Thousands of workers have recently gathered outside shuttered factories there, demanding unpaid wages and forcing local authorities to intervene.

Experts have warned labour unrest could spike as more migrant workers lose their jobs.

Mr Yin said measures included helping the migrants find a job when they come to urban areas, for example by giving them information about available positions, and providing extra training for those returning home.

Unemployment in China stands at 4 per cent, and Mr Zhang Xiaojian, vice-minister of social security, said the government expected to hit 4.5 per cent by the end of the year.

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

The official unemployment rate does not include the millions of migrant workers who are not registered in the place they live in.

Mr Zhang added that demand for workers in 84 cities across China in the third quarter of this year had fallen 5.5 per cent - the first third-quarter drop in 'many years'. -- AFP