Education was not an issue for Guangdong for the first 20 years of the country's liberalisation because the industries the province attracted were labour intensive and required low-skilled workers.

Guangdong residents were also more inclined to set up their own businesses and did not think the lack of a tertiary education would stop them becoming rich if they have business acumen.

However the job market has grown more competitive, and land and labour costs have rocketed amid increasing development, bringing about industrial restructuring.

Factories now need highly skilled labour, putting Guangdong in a quandary because it has neglected to invest in education to keep up with its growth.

Guangdong spent only 2.74 per cent of its gross domestic product on education last year, falling behind poor provinces such as Yunnan, Guizhou and Shaanxi, but the government promised to raise education spending to 4 per cent by 2007. By 2010, that would rise to 5 per cent, in line with the national target.

In February, the provincial government set a goal of raising the student intake to 20 per cent by next year, 28 per cent by 2010 and 40 per cent by 2020.

Guangdong party boss Zhang Dejiang, who made education a key concern as soon as he entered office in late 2002, raised the bar last month when he lifted the target to 30 per cent by 2010 and 50 per cent by 2020.

It was Mr Zhang who ordered the construction of the University Town consisting of 10 branch campuses on Xiaoguwei island for Guangdong universities.

Like elsewhere in the country, population growth and rising unemployment has put pressure on Guangdong's education system to absorb more students.

Wang Yunxiang , a lecturer at Guangdong University of Foreign Studies, said the demand for education was spurred by the baby boom after the Great Leap Forward.

'Everybody comes to Guangdong because there are jobs here and life is good, so Guangdong children need a better education in order to compete for jobs because they won't do menial jobs,' Professor Wang said.

Despite Guangdong's urgent need to expand higher education, many people including academics and government officials are concerned that the rapid pace of expansion may create more problems than it solves.

Professor Wang worries the quality of education is being destroyed.

'They recruit teachers like they recruit soldiers. There is no quality ... The 30 per cent quota was driven by the jobless rate.

'The thinking is that it's better to produce a lot of low-quality graduates than have many street kids running around. They were concerned with social stability,' he said.

But even though they are armed with degrees, the graduates are still not finding jobs because employers do not want them.

This high graduate unemployment rate is so problematic that the government has made universities sign pacts with their students guaranteeing that 70 per cent of them will find jobs after graduating.