Graduates need more help to start business

Having graduated from a university last June, Wang Zhicha opened a small gift shop. But after one year of struggle, he has decided to close shop.

"Of the 100,000 yuan ($16,305) I got from my parents, I've already lost 80,000 yuan," he says with a forced smile. "I should spend the rest on something serious." By "serious" he means taking the national or provincial level exam for civil servants.

Wang is not the only university graduate to fold up his business. According to a MyCOS Institute survey, 70 percent of the university graduates who start a business fold up within three years.

Another MyCOS Institute survey, released recently, found that only 2 percent of the university graduates aim to start a business, compared with about 20 percent in developed countries. In contrast, an increasing number of graduates are taking the civil service exams. In 2012, more than 1.2 million graduates took the national civil service exam for the 12,901 vacancies. The numbers and the ratio both were historic highs.

Almost all university campus surveys show that students prefer to work for "government, State-owned enterprises or government-sponsored organizations", with the last being their top choice. Asked why, their common answer was: Why not? The income is stable and I don't have to struggle for the rest of my life.

Business startups are the last choice of university graduates in China. Unlike in developed countries, where talented students exploit the market to become their own boss, good students in China usually choose State-sponsored jobs because they guarantee a stable income and don't require much hard work. So most of the graduates in China who start a business do so because they have no choice. In March 2011, a China Youth Internet Society survey found that 37.5 percent of the graduates who started their own business belonged to this group.

Another difficulty that graduates face in starting a business is the lack of technological knowledge that can help them become competitive in the market.