Unemployment rate in urban areas stood at 4.04 per cent at the end of March, down from 4.05 per cent at the end of 2015, the Ministry of Human Resources and Social Security said.
"An additional 3.18 million urban jobs were created in the first three months of 2016," said ministry spokesperson Li Zhong here.
The government previously said about 1.8 million workers of steel and energy industries may loose their jobs due to excess capacity.
All the affected workers will be properly resettled, and no one has been left jobless, officials said.
Unofficial reports said the job losses could be with in the range of about to five six million as economy last year declined to 6.9 per cent.
"The data indicate that China's job market remains stable," Li said, attributing the job increase and low unemployment rate mainly to the "slow but reasonable economic growth, the government's deepened reform and innovation drive, as well as pro-employment policies".
But the figure was in line with market expectations and remained within the government's targeted range of between 6.5 and 7 per cent for 2016.
"As the national economy is under increasing downward pressure and structural reform is deepening, the employment situation is a hard-earned result," said Li Chang'an, a professor with the University of International Business and Economics told Xinhua.
Creating more jobs is one of the priorities for the Chinese government to keep employment stable as millions of workers face redundancy due to mergers and reorganisation in industries with overcapacity.
To cushion the effect of job losses on families and society, the central government will allocate 100 billion yuan (USD 15.4 billion) to help laid-off workers find new jobs, Premier Li Keqiang said in March.
The data also shows that gross revenue of social insurance funds increased 14.7 per cent year on year to 1.21 trillion yuan (USD 186.4 billion) while gross expenditures totaled 967.7 billion yuan, up 12.8 per cent from a year ago.