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Entrepreneurs warned of pitfalls

By Zhao Xu (China Daily)
Updated: 2009-03-05 07:47

Women university graduates flock to a special recruitment fair for their demographic at Beijing's Taiping Lake Residential Community yesterday. More than 7 million college graduates are seeking jobs this year. [China Daily]

Dangerous pitfalls lie ahead for university graduates looking to start businesses in the current fragile financial climate, warned Ge Jianxiong, director of the History and Geography Research Institute at Shanghai-based Fudan University.

"The government should tone down on encouraging inexperienced graduates to enter the entrepreneurial world," said the outspoken professor during the ongoing 2nd session of the National Committee of the Chinese People's Political Consultative Conference. "Otherwise, they risk doing more harm than good."

The issue of finding jobs for new graduates has been growing more urgency since the onset of the economic crisis and, according to government figures, 6.11 million will be fighting for positions this year along with the million or so who have been unemployed since last year.

Facing the gloomy prospect under huge public pressure, governments at all levels have promoted self-employment as a way out of the mire. But Ge feels many factors work against this trend.

"Our whole educational system is not geared towards nurturing entrepreneurs," he said. "For a very long time our schools - from primary to university - have excelled in cultivating academic types, but not the do-it-yourself Bill Gates type.

"At the root lies our dominant social value that academic pursuits probably constitute a nobler ambition than most other endeavors."

The college entrance system China has had for the past two decades forces students to narrow their interests and concentrate on subjects on which they are tested.

"A successful entrepreneur needs to have a broad knowledge base, be very creative and open-minded - this is exactly what is lacking in our education," said Ge. "As a result, graduates usually need a 'cushion period' before they break out on their own.

"Unlike in the United States, starting a business right after graduation has not been a major option. As a result, our society is less prepared and there's scant experience to borrow for those wide-eyed first-timers."

On top of this is the deepening financial crisis, which has proved to be the undoing even for seasoned businessmen.

"There are so many unforeseeable factors for graduates starting businesses. The caprice of the financial situation will only expose their vulnerability," said Ge. "Very few will come out unscathed."

Various local governments have issued guidelines for the encouragement of start-ups by university graduates, including providing preferential loans. But Ge said the effect is likely to be limited and could be compromised by corruption.

"The government should prevent ill-advised students from making hasty decisions because the failures they eventually suffer will have a long-term impact on our economy and society," he warned.

He said that while the entrepreneurial spirit should be celebrated at this time more than any other, it's not right for the government to try to relieve the employment burden by painting a rosy picture for graduates.

"It's irresponsible and could have grave consequences," he added. "Setting up a business should only be a complementary means to our employment solution. It's the government's job to create more positions at State-owned enterprises for graduates."

(For more biz stories, please visit Industries)

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