Half of Chinese businesses fail within five years

Fortune magazine statistics showed that 62 percent of US businesses have a lifespan of less than five years; only 2 percent could survive for 50 years. Another study showed that the average lifespan of Japanese businesses now stands at 30 years.

OECD data showed 20 to 40 percent of businesses drop out of the market within the first two years; 40 to 50 percent of businesses can survive more than seven years. Generally speaking, within a specified market, 5 to 10 percent of the businesses drop out within the first year.

Studies on business lifespan both at home and abroad showed that the larger the business scale, the higher the survival rate.

By the end of the first decade, the survival rate for Chinese businesses with a registered capital of less than 1 million yuan, 1 to 10 million yuan and over 10 million yuan is 40 percent, 65 percent and 90 percent, respectively.

In the US, the Fortune 500 companies have an average lifespan of 40 to 42 years, medium and small businesses often have one of less than seven years and transnational companies run from 10 to 12 years. In Europe only 50 percent of medium and small businesses survive five years.