A policy document by the State Council, or cabinet, has asked cities to drop a rule that says non-native college graduates must be permanent residents of an area before they can legally be hired for a job, the China Daily reported.

"The Chinese job market is grim amid the global financial crisis and college graduates are facing huge pressure finding jobs," the cabinet said as it justified its request, according to the paper.

The step is the latest taken by the government in a bid to help millions of graduates and recently laid-off migrant workers to keep earning money despite growing business failures due to the world economic downturn.

The move was intended to let applicants "move almost anywhere for a job," the paper said.

All cities across the country except Beijing, Shanghai, Tianjin and Chongqing, were asked to loosen the residency requirements.

The paper did not explain why those cities were excluded, but they are four of the nation's biggest cities that presumably could be flooded with job seekers if the restrictions were removed.

Last month, the cabinet vowed to help train one million unemployed graduates in the next three years to boost their qualifications, and promised loans to business that hire graduates and to graduates seeking to start businesses.

China's leaders have shown increasing concern over growing unemployment stemming from the world financial crisis, warning it could cause social instability.

It said this month that at least 20 million migrant workers had lost jobs.

The government has recently ramped up efforts to retrain such workers and provide them with business start-up loans.

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