China Encourages Entrepreneurs for Innovation-, Creation-led Growth
Posted: October 18, 2015 Filed under: Uncategorized | Tags: Bill Gate, China, creation, entrepreneurship, innovation, Li Keqiang, Steve Jobs 2 Comments
Young entrepreneurs work at an office area inside the University Students Venture Park, in Shanghai, China, July 29, 2015. REUTERS/Aly Song
Young entrepreneurs work at an office area inside the University Students Venture Park, in Shanghai, China, July 29, 2015. REUTERS/Aly Song
Young entrepreneurs look at their computers at a resting area inside the University Students Venture Park, in Shanghai, China, July 29, 2015. REUTERS/Aly Song
In my post on March 7, I said, “China is learning from the success of Bill Gates and Steve Jobs in developing enterprises with creativity and innovation. It allows college students to drop out to set up enterprises like Bill Gates and Steve Jobs. If their attempts to be entrepreneurs fail, they are allowed to return to their colleges to resume their study.”
Now, in its report “Beijing promotes low-paid college grads to startup CEOs”, Reuters quotes Chinese Premier Li Keqian as saying, “Creatives show the vitality of entrepreneurship and innovation among the people, and such creativity will serve as a lasting engine of China’s economic growth, I will stoke the fire of innovation with more wood.”
Bill Gates and Steve Jobs got no support from U.S. government when they develop their enterprises, China is helping its potential entrepreneurs with enthusiasm. According to Reuters, in addition to warm words, government and universities provides university graduates training, subsidies, free rent, accounting services, internet access, etc. to encourage them to be entrepreneurs.
True, according to government statistics, the success rate of new entrepreneurs is only 2.4%, but the government believes that it is worthwhile.
Reuters says in the report, “Chinese surveys show 20-30 percent of college students now aspire to entrepreneurship or self-employment” There are more than 6 million college graduates in China every year. According to the 2.4% success rate, there will be 28,800 to 43,200 new successful entrepreneurs from college graduates each year.
According to what I see in Hong Kong where there are lots of opportunities to enter colleges, most entrepreneurs begin to be entrepreneurs as they are unable to enter college and get stable jobs after they have left schools. As a result, most entrepreneurs have not received satisfactory school education.
Now Chinese new entrepreneurs will mostly have received college education and training and support from universities. Those tens of thousands college graduate entrepreneurs can make much greater contributions to China’s economic growth.
Obviously, China is injecting funds and making efforts in the right direction.
However, there are skeptics who say that the policy is setting up inexperienced kids for failure. China is giving them training for the inexperienced kids. In fact, almost no entrepreneurs begin to set up their enterprises when they are experienced in doing so.
Were Bill Gates and Steve Jobs experienced kids when they dropped out from college to set up their enterprises?
As I have pointed out that the rate of success is small but China will get well-educated entrepreneurs with ambition.
True, there shall be dismantling of the policy barriers that make life tough for the private sector, such as weak legal protection for new ideas, restricted access to capital, and labyrinthine regulations, but China is also making efforts and achieved great successes in removing such policy barriers. It is attaching great importance to the rule of law and have thus improved legal protection for intellectual property. In addition, it is making funds available for small and medium enterprises and has greatly simplified the procedures for establishment of enterprises and the regulations related to private enterprises.
Certainly, it is difficult to be successful entrepreneurs with innovation and creation, but China’s future prosperity depends on them. China is doing the right things in encouraging and supporting them.
Article by Chan Kai Yee as comments on Reuters’ report.
The following is the full text of Reuters’ report:
Beijing promotes low-paid college grads to startup CEOs
SHANGHAI | By Pete Sweeney Sun Oct 18, 2015 1:42am EDT
Quitting her job as receptionist, joining rock bands and chancing her tattoo-sleeved arm at small business ventures would once have branded college graduate Ding Jia as a rebel in China. Now she can claim state endorsement as a “creative”.
“I haven’t had a formal job in years,” said Ding, 31, sitting in her tiny coffee and cocktails bar on a trendy Shanghai street.
She has no regrets, but no illusions either.
“Entrepreneurship can be a really hard experience,” she said. “Profits can be so thin.”
In the week she spoke to Reuters, she and dozens of nearby businesses were forced to close temporarily by city officials on a regular sortie to enforce regulations.
While most parents might warn their children off high-risk, low-reward self-employment, preferring jobs in government or state-owned enterprises, Ding says her Shanghai nurse mother and cab driver father were supportive.
That attitude finds an echo in high places; recent graduates who start their own businesses are being hailed in state media as a new creative class that will build China’s Silicon Valley.
“Creatives show the vitality of entrepreneurship and innovation among the people, and such creativity will serve as a lasting engine of China’s economic growth,” Premier Li Keqiang said in January. “I will stoke the fire of innovation with more wood.”
In addition to warm words, many are receiving training, subsidies, free office space and other support from district governments and universities.
Optimists hope the next Jack Ma or Mark Zuckerberg will emerge from this pool, but skeptics say the policy is setting up inexperienced kids for failure.
The aim is to help shift China’s factory-based economy towards knowledge-driven services, and address unemployment among Chinese college students. Most private employers have little use for fresh graduates from crowded domestic universities, who consequently can earn less than skilled factory and construction workers.
A Peking University study found that entry-level salaries in Shanghai averaged just 3,241 yuan ($511) a month – a pittance in a city with one of world’s 10 most expensive property markets.
Chinese surveys show 20-30 percent of college students now aspire to entrepreneurship or self-employment, and Cui Ernan, labor analyst at Gavekal Dragonomics, said official data suggests they are following through. Though undergraduate numbers swelled to record highs last year, the number seeking work in the formal job market appeared to shrink.
ENTREPRENEURS BY QUOTA
Cynics say pushing student entrepreneurship is mostly about helping officials meet targets while heading off political unrest among disaffected students, the demographic behind the 1989 Tiananmen Square protests.
A busy entrepreneur, on the other hand, counts as both employed and as a new business registration.
Parker Liu, currently COO of a mobile technology startup in Beijing, began launching new companies before he graduated. He said district officials regularly scoured entrepreneurship events seeking startups to subsidize, often on the understanding that the company would register in their district.
Liu said he had received small subsidies from district governments and helped introduce officials to other startups, but was doubtful about the benefits.
“The real problem is the money doesn’t come with education … These government officers, they didn’t know much about entrepreneurs or startups, but they know a lot about political evaluations. They have a quota.”
Liu said the support also encouraged too many into sectors with low barriers to entry, such as e-commerce, mobile games, and college prep schools.
“In terms of helping the job market, this sort of thing is of marginal benefit,” said Geoffrey Crothall, communications director at China Labour Bulletin.
“They are going to price themselves into the ground, and so the wages they can afford to pay their staff are going to be very low as well.”
While official data is scant, failure rates appear unsurprisingly high.
“They have very poor management skills,” said Cui of Dragonomics. “Most of the businesses run by college students I observe, only a few of them succeeded.”
DREAM COMMUNITY
The University Students Venture Park in northern Shanghai was designed as an incubator for college students considering a startup. The lobby is decked out in a sunny palette and garnished with inspiring slogans about creativity; outside a large sign reads “Dream Community”.
Some have turned their dreams into a modicum of success.
The free rent, accounting services and internet access helped Jiang Gongbao launch his Long Ai marketing company, which has lasted long enough to hire a few employees.
Jiang said he understands the risks, but regards them learning opportunities.
“Failure is not a bad thing, as the process to start up a business is always meaningful,” he said.
The incubator’s deputy general manager, Zhu Jiang, roots for his tenants, but he’s no evangelist.
“I do not encourage all students to start up business. Being a successful entrepreneur requires some characteristics that not everybody can possess.”
Many venture capitalists doubt the incubators do much good, since Chinese bureaucrats with little or no experience running private firms lack the skills to pick successful business plans.
“I think it’s really misguided,” said Gary Rieschel, founder of Qiming Ventures, which has invested in numerous successful Chinese startups including Alibaba.
“A university is a terrible place to learn how to start a company,” said William Bao Bean, another China venture capitalist with a long history of investing in Chinese tech startups.
What is needed, critics say, is a dismantling of the policy barriers that make life tough for the private sector, such as weak legal protection for new ideas, restricted access to capital, and labyrinthine regulations that enable corrupt officials to prey on small enterprises.
“Some countries make mistakes by trying to pick favorites and pick preferred technologies,” said Robert Zoellick, former World Bank chief, in an interview with Reuters in Shanghai.
“Creating a level playing field is the start. You need to have an effective rule of law and property rights. I think China is struggling with that.”
(Additional reporting by the Shanghai Newsroom; Editing by Will Waterman)
New Policy to Encourage Emergence of China’s Bill Gates, Steve Jobs
Posted: December 13, 2014 Filed under: Uncategorized | Tags: Bill Gates, China, college student starting business, encourage self-employment, Li Keqiang, reform, Steve Jobs, tiger mother, wolf father 1 Comment
Premier Li Keqiang mingles with students at Zhejiang University late last month. Photo: Xinhua
In its report “China launches university ‘time out’ scheme so students can start their own businesses” SCMP says today that the scheme aims at providing more employment opportunities for Chinese college graduates by supporting and training them to become self-employed entrepreneurs.
Parents in the US support their children to be independent when they reach the age to enter college and even encourage them to drop out halfway in college education to start their own business. Chinese parents are entirely different. They believe that they have to arrange their children’s future. Their satisfactory arrangement is to enable their children to enter a prestigious college so that they will have the best chance of good permanent stable employment.
The road of risky self-employment is for those who have performed poorly in their school study and are unable to find good jobs.
This is typically reflected in Tiger Mom Ms. Amy Chua’s best seller Battle Hymn of the Tiger Mother. Ms. Chua wanted her daughters’ blind obedience out of her love of them as she wanted them to follow the road arranged by her to be successful when they had grown up. Her parenting approach is not popular in America. American people also want their children to have wonderful future but perhaps due to American values of democracy and human rights, they do not want to copy Tiger Mother’s way of parenting.
However, Ms. Amy’s way is quite popular among Chinese people. Some of them believe that she has not gone far enough. Therefore, a severe father in Hong Kong who calls himself “Wolf Father” later published a book entitled So That Brothers and Sisters in Peking University to publicize his successful way of parenting that has enabled all of his children to enter Peking University, one of the best universities in China. This blogger describes Wolf Fater’s way of parenting in his book Tiananmen’s Tremendous Achievements Expanded 2nd Edition as follows:
Wolf father enforces his strict rules by beating to forbid his children watching TV, surfing the Internet, attending sports activities after classes, having friends and even switching on air condition. His beating is said to be civilized as he stops beating a child when the child reaches the age of 12 and he beats only the hands and legs. However, he hits so hard with a cane that there are always bruises that do not cure until 3 to 5 days later.
Beating has ceased, but absolute obedience remains. Wolf Father even threw away all the plants that his eldest son had grown when the son was interested in biology. In short, his tyranny is absolute. His children must do what he wants them to do and shall not be interested in anything he does not want them to be interested in no matter whether it is good or bad for them.
As such a way of parenting is popular in China, a college student can hardly get his parents’ support if he wants to leave college to start his own business like Bill Gates and Steve Jobs. That is especially true when the child is in a satisfactory college.
This blogger says in the preface of the book that the secret of China’s success lies in its reform that gives play to people’s talents and diligence. The students in satisfactory colleges normally are students with better talents and diligence. Without the government’s policies of encouragement and support, they certainly dare not take the risk to start their own business halfway in their college education even if they have a keen interest in and are confident in their ability in starting their own business.
Therefore, we shall not regard this new policy as merely a scheme to provide more job opportunities for college graduates. It is a way to give play to college students’ talents and diligence so that quite a few talented entrepreneurs will emerge among Chinese college students. It will enable China’s private sector to prosper and bring along the development of China’s state-owned sector by competition.
That is one of the reformists’ tricks to achieve further prosperity. The emphasis on providing job opportunities due to difficulties for college graduates to find jobs is but an excuse to reduce parents’ objection to their children’s commencement of business halfway in their college education.
The following is the full text of SCMP report:
China launches university ‘time out’ scheme so students can start their own businesses
Mainland’s young entrepreneurs encouraged to defer studies and launch companies in move to cope with burgeoning number of graduates
Entrepreneurial students at mainland universities can now defer their studies to start their own businesses in a move by authorities to deal with an increasing number of graduates.
Next summer’s record 7.5 million graduates – 220,000 more than last year – will put pressure on the job market, according to the Ministry of Education.
In a circular on Wednesday, it asked universities for greater flexibility, including allowing students to defer studies if they wanted to try out a business idea.
Unlike Western counterparts who often take a gap year, mainland students must complete their studies, usually four years for degrees, without interruption.
Universities will also be required to offer courses with academic credits in entrepreneurship, and invite business owners, investors and academics to mentor promising students.
Practical assistance in business registration, raising capital and tax reduction would also help students succeed.
Students will be encouraged to open online businesses where they can attract funding and support from financial institutions, non-governmental organisations, trade associations and other companies.
The ministry is to release data on graduate employment next September and report on their employment rate in December.
Graduate employment is a key concern for the state leadership, as many struggle to find jobs upon finishing their studies.
In April, Premier Li Keqiang chaired a State Council meeting on policy direction for graduate employment, which discussed offering incentives to small and medium-sized enterprises to hire recent students. On a tour of Zhejiang last month, Li encouraged students to start their own businesses.
According to Xinhua, the success rate of first-time start-ups is only 2.4 per cent, and even in Zhejiang, where e-commerce is popular, the rate is just 5 per cent.
“I don’t think motivation is an issue. The willingness is there and many have tried but few have succeeded. There are deeper reasons [for the low success rates],” said Xiong Bingqi, deputy director of the 21st Century Education Research Institute, adding that Peking and Tsinghua Universities had let students adjourn their studies to start companies.
The academic standards of graduates were declining and a decreasing capability for innovation meant students would not just have problems starting a business, but also finding or keeping a job, he added.
Liu Gang, director of China Hub, a Beijing-based organisation that provides entrepreneurial training, said the low success rate did not matter because starting a company was a process of failures followed by success. Students learnt more about innovation this way than by working at large companies, he said.
Source: SCMP “China launches university ‘time out’ scheme so students can start their own businesses”
Source: Chan Kai Yee Tiananmen’s Tremendous Achievements Expanded 2nd Edition
Tiananmen's Tremendous Achievements 