HONG KONG - A SHRINKING job market in Hong Kong has dashed the dreams of many mainland graduates to find work in the city.

'The present economic slump has affected local employers' desire to hire mainland graduates,' said Mr Geng Chunya, president of the Hong Kong Association of Mainland Graduates.

Hong Kong has become a more attractive destination for mainland job-seekers following the passage in June of new legislation that allows Chinese graduates to work in Hong Kong without a visa for 12 months.

But of the 6,500 mainland graduates who headed to Hong Kong last year, only a-fifth to a-quarter of them managed to clinch a job in the city.

This figure is set to drop further, said Mr Geng.

Economists at HSBC expect unemployment in Asia excluding Japan to rise more than a full percentage point this year to 5.9 per cent, with Hong Kong and China accounting for most of the increase, reported Reuters.

Chinese officials, spurred by the global financial crisis that has slowed economic growth and nervous about the prospects of more than 1.5 million unemployed college graduates, have stepped up spending and bolstered programmes to help graduates get jobs.

Unemployment among recent college graduates stands at 12 per cent, according to government statistics, nearly triple the overall unemployment rate of 4.2 per cent at the end of December, itself the highest in five years.

Finding work for new graduates will be one of China's top priorities, the State Council or the Cabinet has said.

In Shanghai this month, Mayor Han Zheng announced a job stimulus package to help 213,000 new graduates, offering to pay for vocational training and to assist in setting up internships if jobs can?t be found.

A jobs programme launched in 2006 by top party officials to send graduates to the countryside is also getting a boost. So far, 78,000 graduates have signed three-year contracts to participate in the programme, but more are scheduled to be enlisted this year, officials said.

The Beijing municipal government announced last month that an additional 3,000 local college graduates will work as village officials this year, while Guangdong province has announced that all graduates who want government jobs will have to first work or train in rural villages.