BEIJING (BLOOMBERG) - China's youth unemployment rate rose to the highest this year, as students graduate and China's economic recovery slows on virus disruptions and weakening global demand.

The unemployment rate for those between the ages of 16-24 - which captures graduates from school and college - rose to 16.2 per cent last month from 15.4 per cent in June, data from the National Bureau of Statistics showed.

A record 9.09 million students will graduate this year, putting pressure on the labour market and the government to ensure there are enough jobs.

The youth jobless rate was more than three times the overall rate, which ticked higher to 5.1 per cent in July, and was the highest reading since the statistics bureau started releasing data for this age group regularly in February.

China aims to create more than 11 million urban jobs this year.

"The unemployment rate generally tends to rise relatively sharply in June and July as college graduates enter the labor market," Mr Fu Linghui, a spokesman for the National Bureau of Statistics, said at a briefing on Monday (Aug 16).

But "the overall employment situation remains stable" this year, he said, as the total jobless rate was lower than 5.7 per cent reported in the same month in 2020 and 5.3 per cent in 2019.

The data indicates persistent pressure on the job market, according to Mr Bruce Pang from China Renaissance Securities Hong Kong.

"Going forward, the government will need to take actions as guided by the Politburo meeting, step up employment services to college graduates, make it easier for migrant workers to go out to work, and better protect the rights of workers employed by the gig economy," he said.

Later Monday, China's Cabinet said employment should be prioritised with more supportive fiscal and monetary policies, according to state broadcaster CCTV.

Also adding to the pressure, an increasing number of Chinese students overseas are looking to return home for jobs. The ratio of students planning to return to China this year is expected to hit 31 per cent, up 6 percentage points from 2020, according to a New Oriental's annual report on Chinese students' overseas study.

The returning students are younger and more educated, pointing to more determination and higher competence coming back home, said the Centre for China & Globalisation in a March study.