Students in Northeastern University scramble for limited job placement ZHANG WENKUI

In the eyes of most Chinese, it is a positive step for university graduates to go on to work for multinational companies or government organizations, while roadside shops are the preserve of the less educated eking out a living.

Times are changing and Wu Jie, a postgraduate majoring in business management who graduated from Jiangxi Agricultural University in July 2013, is bucking this trend. Wu set up a shop in Nanchang City, capital of Jiangxi Province, selling canvas products, mainly bags.

"This little shop is not simply a way for me to make a living. I take it as the beginning of my career," Wu told ChinAfrica. After less than one year, his shop has earned him more than 150,000 yuan ($24,470). "My business is growing."

Wu did try to find a job after graduation, but failed. "As I majored in business management and had received business start-up training, I decided to start my own business," he said. "With what I learned in university, I'm sure I can do better than other roadside shops."

While Wu was forced by circumstances to start his business, university students are now encouraged to do so.

Before graduation this year, which usually falls in June-July, nine Chinese government agencies, including the Ministry of Human Resources and Social Security and the Ministry of Education, jointly issued a notice, vowing to work together to help graduates start up their own businesses. Incentive measures, such as policy, financial and resources support, will be strengthened to unblock bottlenecks for them to set up their own businesses. Universities and colleges are also encouraged to initiate business training classes. According to the notice, efforts will be made to help 800,000 graduates start up their own businesses from 2014 to 2017.

"It's really necessary for the government to take such measures to encourage more students to shift their focus from finding a job to starting up their [own] businesses," said Xin Changxing, Vice Minister of Human Resources and Social Security. "Encouraging graduates to start up businesses can in turn help create more jobs for future graduates." 

Government support role

China's huge population of more than 1.3 billion has made employment a difficult issue facing graduates. Statistics show that in 2014, a total of 7.27 million students will graduate from institutions of higher learning, equivalent to the total population of Sierra Leone and Equatorial Guinea. "Against this background, encouraging graduates to start up businesses is an important option," said Xin at a press conference on May 31.

According to Xin, only 1 percent of university graduates choose to start their own businesses after they leave campus. In developed countries, the ratio is 20-30 percent.

A survey among university graduates last year shows that the major challenges in the way of starting up businesses include lack of funds and experience, and the difficulty in finding a venue. Given these, the nine government agencies issued corresponding supporting policies. Universities and other related institutions of higher learning are required to strengthen education and training in starting up businesses, to help students gain certain experience and get prepared. Competent departments for industry and commerce are required to lower the threshold for opening a new business, and banks are called on to facilitate bank loan applications and to offer loans with lower interest rates.

Starting March 1, China's modified Company Law eliminated the minimum registered capital for establishing an enterprise, which means graduates no longer have financial barriers in opening a business. 

Training entrepreneurs

Besides the government's efforts, many institutions of higher learning also play their own part to help their graduates start up businesses.

"I am very glad to know that more universities, including mine, will launch entrepreneurship education for students," said Zhou, a student at Suzhou University of Science and Technology. He would only give his surname. Though he is in his third year, he is nicknamed "the boss" by his classmates, as he runs a market stall in his spare time. "My business, though very small, brings me many challenges as well as a lot of fun," said Zhou, adding that he hoped to get professional training in solving operational difficulties. Zhou indicated he would continue his business by opening a shop after he graduates.

In fact, many universities have already launched business classes and training. For instance, China Youth University of Political Studies introduced KAB (Know About Business) program from abroad. Currently, the program is taught in six classes.

Another example is Yiwu Industrial and Commercial College. Located in Zhejiang Province, one of China's business centers, the college is famous for its Enterprise School. In this school, students are only taught how to do business online, mainly on taobao.com, China's biggest C2C and B2C online business platform. Students do not need to submit their homework and their scores are based on the success of their business over the course duration.

"Surely, students [in my school] have sufficient experience in doing business after graduation," said Jia Shaohua, Vice President of Yiwu Industrial and Commercial College, who participated in founding the Enterprise School in 2009.

Right mindset

Experts believe that though the government and institutions of higher learning have been striving to encourage university graduates to start up their own businesses, the efforts are not enough. More time should be focused on guiding students to have the right mindset when approaching small businesses after graduation.

"Many university students scorn at starting up small businesses, equating it to those who failed college entrance examinations and do not have the chance to go to universities," said Lu Jingping, an observer of social affairs. "This [attitude] should be changed as starting a business is the beginning for some students to realize their dreams." He also admitted that it would be an arduous and long-lasting task.

"It is true some of my classmates believe that selling things on a stall should not be the work of those who have received higher education. They even ask me to stop my business, saying that would make them 'lose face' as my classmates," said Zhou. "But I don't think so. I will continue my work." 

Careful thought needed

Though it is much easier for university students to start up their businesses, experts warn that doing business would not be an easy task, nor does it fit every one.

Wang Yining now works in a design company in Shanghai, but he had a painful experience of operating his own company. Upon graduation in 2011, he and two of his classmates established a design studio. However in less than a year he had to close it due to lack of clients.

"It was really painful to shut down my studio," said Wang. "The main reason is that we do not have sufficient experience in managing our business, though we can do well in design."

Wang's is not the only case, and because of various difficulties and challenges, many graduates failed in starting up businesses.

"We encourage students to start up their own business, but we also hope they could make comprehensive and rational consideration before doing that," said Wang Yanru, Professor of China Youth University of Political Studies. "They should make full preparation before they can start their own business."