SHANGHAI - CHINESE authorities urged state-run firms to refrain from job cuts in 2009 even though they are likely to face a difficult year due to the global slowdown, state media reported Friday.

'State-owned companies must keep stability of staff team and try not to cut jobs,' the Xinhua news agency reported, citing Li Rongrong, chairman of the State-owned Assets Supervision and Administration Commission, a watchdog.

'The impact of the financial crisis on our economy and state companies must not be underestimated,' he was quoted as saying.

'The situation next year is grave and difficulties will mount. More emphasis must be put on the issue of ... social stability.' The remarks came amid increasing concern over the impact of the economic crisis, following a number of riots in recent months linked to layoffs.

Chinese officials have unveiled a number of measures aimed at maintaining and creating jobs, particularly among the nation's millions of rural workers, including financial aid to companies.

The government expected to remain within its target of a 4.5 per cent unemployment rate by the end of the year, Zhang Xiaojian, vice-minister of social security, said recently.

The rate is widely seen as vastly underestimating China's real jobless problem because it does not include millions of rural workers. -- AFP