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Purpose

This paper aims to review policy innovations in China for addressing the graduate unemployment crisis that has been created by the expansion of higher education in the past decade.

Design/methodology/approach

The authors draw on government documents, research findings, and mass media reports to highlight the key measures of the Chinese government to alleviate the over‐education problem and to improve college graduates' employment prospects.

Findings

The review describes government efforts both at the institutional level to enhance student employability and at the national level to create alternative employment channels. The Chinese experiences show that the challenges posed by the graduate employment crisis may turn out to be a new opportunity to reform higher education in order to better address the needs unique to a country's own society.

Social implications

The review of the Chinese case will inspire policy makers in other countries to seek alternative routes for the development of their own higher education.

Originality/value

This is the first study of its kind to address the recent policy innovations and their implications for potential reform.

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