Surveys show university graduates today consider big State-owned and top international companies with high job security or reputation as their primary choice

This year, a record-breaking 7.95 million students will graduate from universities across China, about 300,000 more than last year. Many have dubbed 2017 as the most difficult year for new graduates to find a job.

But despite the massive talent pool, small and medium-sized enterprises, especially start-ups, are finding it difficult to hire new graduates.

One of the main employment obstacles cited by employers is salary expectations.

"I had an interview with a new graduate who, despite having no job experience and little knowledge of code writing, expected a monthly salary of at least 13,000 yuan ($1,913). He also said that he only wanted to work in Shanghai," said Ni Hualiang, founder of OYMotion Technologies, a start-up in the Zhangjiang Hi-Tech Park in Shanghai.

The 2016 Eco-Index of Entrepreneurship and Innovations in Shanghai, released by the Office of Research Management of Shanghai Jiao Tong University in December, revealed that nearly 60 percent of start-up companies said their biggest expenditure and bottleneck lie in human resource.

For small companies with modest budgets, employee wages inevitably present an obstacle to further development. Ni added the bigger spending powers of large corporations work against small companies.

"Even though this person is inexperienced, there is a possibility he could actually find a job in a big company that is able to pay him that much. It is difficult for us start-ups to compete against the big companies for talents," said Ni.

"It is really difficulty to find the right staff for small companies like us, many job seekers see start-ups as their last option," he added.

Another employment obstacle is the perception of companies. According to a report released by 51job.com, a major recruitment platform in China, State-owned companies and those listed in the world's top rankings are still the most popular among graduates as they are associated with job security and sophisticated work environments.

Pan Lu, a graduate of Tongji University, said that he was offered a satisfactory salary by several start-ups but ultimately declined because he feared losing his job.

"Finding a job is not easy, especially if you want to work in top companies and State-owned enterprises that have good reputations. The high standards these top companies have set close the door for many graduates," said Pan.

But not all new graduates desire to be in well-known companies. Zheng Yang, a post-graduate student of Zhejiang University, said he would rather begin his career in a start-up as there are more opportunities to take the lead and learn.

The rising entrepreneurship fever in the country is also proving detrimental for start-ups looking for manpower. Since Chinese Premier Li Keqiang initiated the national push toward mass entrepreneurship and innovation in 2014, the government has implemented numerous preferential policies to support new businesses.

According to official statistics, an increasing number of graduates today are choosing to start their own business. In the past two years, authorities in Shanghai have helped more than 10,000 people start their own companies. Over 60 percent of these individuals are university graduates.

In addition, a growing number of graduates are also choosing to slow down their lifestyle. Based on the findings of a survey released by Zhaopin.com, a major recruitment website, about 10 percent of the 93,420 graduates polled said they would not embark on a job hunt immediately after graduation. Instead, these individuals said they are highly hesitant about taking on a job they have no interest in and would rather explore working on things they like.