Employment levels in China began to recover over the past three months in the latest evidence of the rapid rebound in the economy from the international financial crisis as a result of heavy public investment.

Yin Weimin, China’s labour minister, said there had been a modest increase in the number of jobs in the economy during June, July and August, reversing the sharp slump in employment which began last October.

Mr Yin warned that the employment situation remained “grave” and said that the “global financial crisis has not bottomed out yet”. However, with most developed countries still witnessing increases in unemployment, the figures underline the resilience that the Chinese economy has shown in recent months.

The improvement in new jobs could encourage Chinese policymakers to begin withdrawing some of the monetary and fiscal stimulus they have pumped into the economy since the fourth quarter of last year. Chinese leaders have consistently said that they do not want to tighten policy too soon, for fear of prompting a “double-dip” slowdown, however there are concerns that the explosion in new bank loans is leading to potential bubbles in property and equity markets and causing parts of the economy to overheat.

If the trend in rising employment continues, it could help underpin consumption levels.

The news about the rebound in new jobs follows a number of anecdotal reports in recent weeks that factories in China’s main export-producing regions, such as Guangdong in the south and Zhejiang in the east, are finding it hard to recruit workers.

Mr Yin said these stories about labour shortages demonstrated the “economy’s trend of recovery” although he said they were likely to be only isolated instances. Many economists expect to see a modest recovery in China’s exports in the coming months, although this could be down to restocking by customers in the US and Europe rather than a rebound in underlying demand.

Despite the improving trend, the devastating impact on China’s labour market from the financial crisis was underlined by a report from a government think-tank released on Tuesday. Researchers at the Chinese Academy of Social Sciences said that 41m Chinese workers lost their jobs as a result of the crisis and that about 23m of those still remained out of work.