BEIJING, May 13 -- Preferential policies will be granted to encourage college graduates to work at grassroots or start businesses in a move to boost employment, the State Council, China's cabinet, announced on Tuesday.

Graduates that decide to work at grassroots will be provided with tuition compensation or a reduction in their student loan, the State Council said in a statement.

Small-sum guaranteed loans or subsidies will be given to new graduates to open online shops, it said. Small and micro businesses in technology will benefit from similar policies once they recruit a certain amount of college graduates.

According to the statement, state-owned enterprises are required to publish employment information on the Internet to safeguard a level playing field in recruitment.

The authority urged governments at all levels to give top priority to boosting employment among college graduates.

Figures from the Ministry of Education show 7.27 million university students will enter the job market this year, mostly in June and July. The number is 280,000 more than last year.

China has been confronted with a tough employment situation due to slowing economic growth, with an increasing number of jobless people, including college graduates and employees from sectors plagued by overcapacity.