BEIJING (AFP) -- China will be unable next year to create jobs for 15 million people -- nearly equivalent to the entire population of the Netherlands, state media reported.

An estimated 25 million urban residents will be seeking jobs and they will be competing for just 10 million vacancies, the China Daily said, citing a government think tank researcher.

"We anticipate employment pressure will remain high in 2007," said Yang Yiyong, deputy chief of the Economic Research Institute under the National Development and Reform Commission.

To make things worse, 120 million surplus laborers have migrated to the cities, mostly from the countryside, looking for odd jobs, he said in the "2007 Analysis and Forecast on China's Economy".

A record number of 4.95 million new university graduates -- 820,000 more than in 2006 -- will face a "grave" situation in the job market next year, according to the Ministry of Education.

The urban registered unemployment rate in China was 4.2 percent in 2005 while no figure is immediately available for this year, the report said.

Foreign economists have frequently criticized China for publishing unreliable unemployment statistics.

They especially target the fact that rural unemployment tends not to be counted as part of the figures.

In order to alleviate the employment strains, the country will have to vigorously expand the service industries and subsidize re-employment efforts, Yang said.

The central budget has earmarked 25.1 billion yuan (3.2 billion dollars) to fund re-employment this year, according to the newspaper.

Yang's institute has proposed that central and local governments should allocate at least 40 billion yuan next year, it added.

The Chinese economy grew 10.7 percent in the first three quarters over the same period last year.

However, productivity gains mean employment opportunities do not rise at a similar rate.