Graduates need more help to start business

In 2012, the World Intellectual Property Organization said it had received more than 526,000 patent applications from China, or one-fourth of the world's total, but very few of them were submitted by fresh graduates. Though there are no national data, students from China Jiliang University in Hangzhou, Zhejiang province, have got approval for only 10 invention patents in the past 10 years. This is surprising because CJU claims to be one of the top institutions from where students get patents.

Shortage of startup funds also is a common problem for graduates. Unlike in the US, where young graduates can benefit from a ripe capital market to start a business, Chinese graduates still find it difficult to get support from commercial investors. A 2008 survey found that 82 percent of the Chinese graduates who start a business get their capital from parents, while only 1 percent benefit from commercial investments.

The problems faced by graduates in starting a business have now drawn wider attention. At his first press conference after taking office, Premier Li Keqiang talked about the problems graduates faced in starting a business and promised to help solve them.

The government exempts people who start a business within two years of graduating from paying income tax for the first one to two years. It also offers a low-interest loan of up to 20,000 yuan. Besides, many provinces have asked State-run banks to issue low-interest loans to help fresh graduates start a business. In Beijing, for example, some fresh graduates can get up to 500,000 yuan as loan - for which the local finance department will pay the interest - to start a business. And Shanghai started a State-supported "angel fund" in 2011 to support fresh graduates with loans of up to 300,000 yuan for three years.

The problem is that the government support level is low in poor regions, where graduates need a lot more help. In landlocked provinces like Anhui, a fresh graduate can get only 50,000 yuan as loan, while in neighboring Henan the amount is even lower. This is ironical because a 2008 survey showed that graduates in less developed provinces where the jobless rate is low are more likely to start their own business.

Moreover, a local government alone cannot help all the graduates. For instance, in Shanghai less than 200 graduates can avail of the "angel fund" every year, which is quite a small number compared with the number of graduates passing out each year.

Therefore, more needs to be done to encourage fresh graduates to start their own business. To begin with, the government could introduce more favorable policies to help graduates starting a business to enter the market. In fact, graduates need the encouragement and active help of the entire society to succeed in their business ventures.

The author is a writer with China Daily.

E-mail: zhangzhouxiang@chinadaily.com.cn.

(China Daily 07/09/2013 page9)