China is rolling out support for a record 10.76 million college students poised to graduate this year, amid heightened competition for jobs and slowing economic growth. The government will offer special help to young entrepreneurs as “starting a new business has a multiplier effect in driving up employment”, the National Development and Reform Commission (NDRC), China’s top economic planning agency, said on Friday. “In recent years, more college graduates have taken part in entrepreneurship, but they also face difficulties in financing, lack of experiences and services among other [issues],” the NDRC said in a statement. “The exemplary activities this year will revolve around the promotion of college graduates’ entrepreneurial practices and employment opportunities.” The list of preferential policies include free, government-funded start-up incubators, special loans with reduced interest rates, fee and tax cuts, as well as the possibility for college students to retain school credits while taking years off to start a business. Chinese graduates return to find Western degrees no longer an ‘advantage’ The 10.76 million students set to enter the job market in 2022 does not include those who graduated from overseas universities and are returning home. China’s job market is a top priority for Beijing and comes amid a host of economic challenges , including sporadic coronavirus outbreaks that continue to weigh on consumption, a property market downturn, supply shocks that have driven up the cost of raw materials, and tensions with Western nations. The country’s small and medium-sized enterprises (SMEs), China’s main source of jobs, were particularly hard hit by the pandemic and are still under enormous pressure. About 4.37 million of China’s smallest businesses permanently shut their doors in the first 11 months of the year , more than three times the number of new ones that opened during the same time, according to data obtained by the South China Morning Post . At the end of 2019, SMEs accounted for about 80 per cent of the nation’s non-government employment. In addition to a growing number of college graduates, competition for jobs has been intensified by lay-offs caused by China’s regulatory clampdowns on a number of sectors, including tech, private tutoring and real estate – all of which used to be highly sought-after industries for employment. Youth unemployment is already high, reaching 14.3 per cent for 16-24 year olds in December, official data showed. There are also signs graduates are postponing employment, which analysts warn could further weigh on the economy. The government announced a range of incentives for companies to employ fresh graduates last week. Why are China’s small firms the backbone of the economy? Small businesses that employ a certain proportion of new graduates, as well as young people who graduated within two years but have been jobless, will be eligible for benefits and loans with reduced interest. Local governments have also been implementing policies to stablize employment for graduates. For instance, authorities in Guangdong, the most economically developed Chinese province with gross domestic product bigger than that of Italy, have encouraged SMEs to take in more college graduates by offering subsidies. Graduates who become teachers in rural areas can get a refund for their college tuition, while benefits are available for young people who take up work in agriculture, medicine and poverty alleviation in the countryside. The NDRC said employment opportunities will be created for female graduates, families where no member is employed and households receiving the minimum level of social security benefits.