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From the classroom to the boardroom

By Zhou Wenting ( China Daily ) Updated: 2013-06-18 07:29:13

From the classroom to the boardroom

Cai Haoyu, CEO of MiHoyo, in his studio in Shanghai. The computer science major registered an Internet technology company with classmates after graduating last year. SHEN YU / FOR CHINA DAILY  

Graduates are being helped to start their own companies. Zhou Wenting reports from Shanghai.

Wu Chaoqi, a 24-year-old Shanghai entrepreneur, is not sure how long his business will survive. He joked that his company's method of delivering wine by moped means that the logistics costs are far lower than those of his competitors. However, his humor underplays a serious problem. "Sure, it saves on expenditure, but also emphasizes an undeniable shortage of orders," he said.

After graduating from college in September, Wu registered his company, but crucially didn't have to pay the usual registration fee. The policy, which was introduced in Shanghai four years ago, was rolled out nationwide last year to encourage and support young businesspeople.

The preferential policy means that young entrepreneurs who set up their own business within two years of graduation are exempt from the minimum fee of 30,000 yuan ($4,900) to register a limited liability company with capital of less than 500,000 yuan. However, the sum must be paid after two years in operation.

The policy has encouraged new entrepreneurs. In the first five months of this year nearly 2,400 college graduates had opened enterprises in Shanghai. In 2010, the number for the full year was 1,882, according to the Shanghai Administration for Industry and Commerce.

The municipality also offers several other incentives as it seeks to boost the number of young entrepreneurs and counter the threat of high levels of graduate unemployment. Meanwhile, China's universities will churn out nearly 7 million graduates this month.

However, some experts have warned that the policies will also encourage a rash of "blind" entrepreneurs.

"In certain districts, people with little more than just a business idea can rely on the local governments to provide office space, financing channels and tutors for the first six months of their business, but who will look after them for the rest of their careers?" asked Zhu Jiang, general manager of the entrepreneurship center at Fudan University's technological park.

Sales and wine are the key words for Wu, a native of Lishui in Zhejiang province. While working as an intern, selling insurance and tourism projects, he attended 100 wine-tasting events for his own pleasure and eventually decided to take advantage of the preferential policies and distribute imported wines.

'Green channel'

He and four classmates formed the company and scraped together a combined start-up sum of 40,000 yuan.

"The zero threshold gave us the confidence to make our business dream a reality. Without it, we would have had to pay at least 10,000 yuan for an agency to find the registration fee for us, and we couldn't afford that," he said.

Wu and his colleagues also welcomed the "green channel" offered by university entrepreneurship centers: Graduates hand over their ID cards, graduation certificates and business plans to a center, which will apply to the industry watchdog for a business license on their behalf.

Wu was prepared to weather some hard times during the initial operating period. He ate simple dishes such as fried rice and eggs for the first few months, and each employee earned just 2,000 yuan a month, the maximum he could afford to pay them.

However, in retrospect, he believes he and his co-founders did not prepare the ground thoroughly enough.

He set a goal of reaching 200 clients, including bars, restaurants and hotels, within one year of starting. "However, I didn't realize that many customers at those places only order Chinese brands such as Changyu, or Dynasty, a Sino-French brand. There's no room for me, despite the quality of my imported wines," he said.

"I tasted hundreds of wines in the two months before I started the company and thought my selections were right for the Chinese market. I believed that passion and diligence would guarantee success," he added.

He preferred not to disclose the company's turnover, but admitted that he still owes his co-founders the iPhones and iPads he had promised as year-end bonuses.

Now, experts are discouraging the unprepared and are keen to emphasize that zero registration fee does not mean zero risk.

"Never expect preferential policies to guarantee entrepreneurial success. Running a business is fairly comprehensive and involves leadership, a good mental attitude, environment and social connections," said Jia Xinguo, principal of Shanghai Value-Plus Vocational and Technical Training School, which specializes in training entrepreneurs.

"The registration fee is just a small part of the total investment in an enterprise, and the policies are small benefits in terms of an entire career. Survival of the fittest is always the principal rule of the market," said Zhang Yusong, a spokesman for the Shanghai Administration for Industry and Commerce.

However, many graduates have been inspired by the heightened competition for jobs. Statistics from the Ministry of Education show that while the number of college graduates has hit a record high, job vacancies are down 15 percent compared with last year, partly because the Chinese economy has entered a period of slower growth.

 

From the classroom to the boardroom

New graduates look for work at a job fair in Shanghai at the weekend. The fair off ered about 10,000 employment opportunities at 500 businesses. [Photo/Xinhua]

 

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