Startups upstage SOEs for jobs

People at the Garage Cafe, a grassroot entrepreneurs hub, in Zhongguancun, Beijing, in January. [Feng Yongbin / China Daily]

That sentiment faded over the years as stagnant pay made it increasingly difficult to care for his young family and elderly parents. Nymar struggled to maintain a middle-class lifestyle on his 9,000 yuan monthly government salary, as annual inflation averaged almost 3 percent.

The shrinking benefits and influence for civil servants also helped make up his mind. He ultimately decided to join a business importing overseas goods to China.

"There has been a real initiative to limit the power and interference government officials have on corporations, which leads to a drastic decrease in feelings of achievement," said Li.

He left government about the same time five colleagues departed for the private sector. Kong Xuan, 35, is another former civil servant in Jiangxi province now setting up his own Internet finance startup in Hangzhou.

"The biggest difference is now I am a lot happier," said Kong. "The Internet industry is much more vital."

As a new generation emerges who are not as tied to the government, the government is pondering on steps to retain control, said Isaac Mao, an angel investor and founder of smart device maker Aivvy Inc.

"There's an inherent conflict in all of this," said Mao. "To think that you can have true innovation and a thriving technology sector but not give up power to some extent is delusional."

Already change is under the way as young people who have gained success overseas return to China.

Hou Yu, a 26-year-old former Goldman Sachs Group Inc. banker, returned to the mainland from Hong Kong last year to set up her own online finance firm. She is focused on working with small and medium enterprises.

"China's current technology boom is intertwined with reform in finance and politics and energy, environment and health care," said Hou, who graduated from New York University with a master's degree in mathematics. "This is a very powerful process and it is all very exciting."

For Nymar Li, the trend away from the civil service can only have positive benefits on his generation. They have the opportunity to create and help improve the country.

"These people are the best and brightest," said Li, "and bright people are restless."