Govt to help grads start businesses

Updated: 2014-05-14 04:06

By XU WEI (China Daily)

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The central government released a string of measures on Tuesday supporting student entrepreneurs and startup businesses as the country's college graduates face another tough year in the job market.

As part of a plan to support startup businesses from 2014 to 2017, the State Council issued a notice requiring colleges to open courses that prepare their graduates to start businesses. Financial institutions should also provide banking services that fit the graduates' needs.

The country will see a total of 7.27 million college graduates this year, a majority of whom are expected to enter the job market in June. The number will be 280,000 more than last year, which was considered the hardest year to find a job since the global economic downturn.

The notice also said that the government will encourage enterprises, industry associations and angel investors to provide funding for student entrepreneurs through multiple funding channels.

The government also made it clear that it will encourage startup businesses on e-commerce platforms, and college graduates who open such businesses will be given small-sum guaranteed loans and interest subsidies.

The notice also stressed the implementation of some earlier support measures, including lowering the threshold for registering a company, tax reductions and tax exemptions for college graduates and students who return from overseas studies.

The measures that encourage startups are part of a string of policies designed to help college graduates cope with challenges in the job market this year.

The central government will encourage the graduates to work at grassroots levels and in the country's less developed central and western provincial areas.

Small and micro businesses that recruit college graduates will be given one-year social insurance subsidies, and such businesses in the technological industries will be given a maximum of 2 million yuan ($320,500) in small-sum guaranteed loans.

The bleak employment situation for college graduates has been a key concern for the central government. In January, Premier Li Keqiang promised better support for student entrepreneurs during a forum in Beijing at which the government sought opinions from representatives in science, education, culture, medicine and sports, as well as from migrant workers and young business owners.

According to a survey released on Tuesday by the Institute of Economics of Education at Peking University, 71.9 percent of college students who graduated last year were able to find jobs.

The survey, which sampled more than 15,000 college graduates in 21 provincial areas, also reported that college graduates earn an average starting monthly salary of 3,378 yuan.

Liu Junsheng, a researcher at the Labor and Wage Institute of the Ministry of Human Resources and Social Security, said the job market will only become more difficult in the near future.

"The trend is that more and more students are being enrolled into colleges, and when they graduate, some of the students who graduated before them have not yet found a job," he said.

Liu said encouraging grads to start up businesses will not only ease the pressure on the job market but will help transform the economic structure — though warns that college students must be adequately prepared before starting businesses.

"They must realize that it will never be easy, and they will meet challenges they never would have imagined. They must be patient and start small," he said.

Liu added that the grads must also do market research and be prepared in a variety of skills.

Chen Dingbang, a college student from Guangzhou-based Sun Yat-sen University who is opening a restaurant in Guangzhou, said the crucial part for student entrepreneurs lies in the funding.

"Other than that, the competition in the market is open and you are not in any way different because you are a college graduate," he said.

Chen said the reason why some college graduates fail in the job market is because of their high pay expectations.