Apparently, China suffers from large-scale unemployment of college graduates (2e6 unemployed this class). Either the schools suck and nobody wants to hire the kids, or the Chinese economy can't absorb them. I doubt the fault lies with the former.
Educated, unemployed young adults spearhead revolutions. China's ruling party should adopt Works Progress Administration-type programs to mop up some of this unemployment. Funding can come from either printing money (as China's economy grows, they need to do that anyway), or the gov't can get its Taxation Bureau in order (anecdotally, I hear that the federal gov't can't collect because *many* people underreport or don't report income). China's best solution probably lies in a combination of the two.
Failure to handle this situation will raise the probability of unrest in China which may make for lots of disturbances around the world were production and exports affected.