A difficult road for budding Chinese entrepreneurs

By Jeff Pan (Chinadaily.com.cn)
Updated: 2007-02-05 11:31

Starting a business is a dream for many young people in China, but they are to face more obstacles than their American and Spanish counterparts on the way to becoming their own bosses, according to a cross-cultural entrepreneurship research project jointly conducted by Appalachian State University in the US and the University of Alicante in Spain.  

The study, which questioned 1,000 students from a variety of universities in the United States, Spain and China, showed that more than half of Chinese respondents have seriously considered starting their own businesses.

This figure is not surprising, considering most Chinese currently in their twenties were raised at a time when the Chinese economy was experiencing rapid growth after opening up in the late 1970s.

Seeing the wealth of opportunities in China, the new generation wants a piece of the economic pie, preferably by running their own businesses. But social and family forces seem to be working against the budding entrepreneurs. Chinese respondents were much more concerned with finding viable business ideas, fear of failure, and support from family and friends than American and Spanish students.

Eighty percent of Chinese students interviewed had friends who started their own businesses in the last three years. However, compared with their American and Spanish peers, fewer Chinese students had entrepreneurs in their immediate families. More than half believed their families would be indifferent or actively try to prevent them from pursuing an entrepreneurial career.

"I think this is partly because our parents went through a significantly lower level of material comfort, and most of them are pretty content with what they have now," said Qu Baoyu, a young white collar working in Beijing. "They do not want their children risking losing what they have worked hard to earn."

"A lot of the entrepreneurs in our parents' generation started businesses to survive. Young people today do it more for self-actualization. There is probably a clash of ideas concerning entrepreneurship. They don't see kids today starting a business as 'necessary'," Qu said.

On the contrary, in developed countries like America where the parents of today's generation were raised in affluence, support from families and friends were much less of a concern for the young people. American students ranked "support from people around them" as No. 14 in terms of barriers to starting their own businesses, a sharp contrast with Chinese students who ranked it seventh.

A university education in China did not meet the needs of potential entrepreneurs. According to the study, nine out of ten Chinese respondents were interested in having a course in entrepreneurship at their universities, the highest number of the three countries.

According to the study, the third biggest barrier for Chinese students in starting their own business after lack of initial capital and excessive risk, is a lack of ideas for a business to start.

"The entrepreneurship class I took at Appalachian State University forced me to look at what a real need is in the U.S. marketplace. I realized that the Chinese style of glass-brewed tea makes drinking tea easy and is also a visual experience which we feel American consumers will appreciate," said Jason Dalrymple, a student entrepreneur who started a small company called Teasy to take advantage of the growing American tea industry by introducing Chinese glass-brew tea cups and individually-packaged servings of loose tea suited for this style of brewing.

Dalrymple said his international experiences, including three months living in China, had a huge impact on him. "The combination of this new knowledge and experience with my entrepreneurial studies gave me a unique insight into the American marketplace," he said.

The growth in international travel, exposure to foreign cultures and especially the rise of the Internet have contributed greatly to the generation of new business ideas. "The Internet not only allows me to communicate with my manufacturers in China or my packagers in the northeastern U.S. but I am also able to sell my products online to everyone in the world," said Dalrymple. "Twenty years ago, a business was restricted to selling in its local geographical area, but the Internet allows a single person to sell to the entire world."

"Hai gui" , or "sea turtles", a tongue-in-cheek reference to students who have studied abroad, are generally more open to foreign trends and ideas. When these ideas are skillfully incorporated with the Chinese condition, the results are usually fruitful. A number of high-tech companies in China were founded or headed by "sea turtles", such as Zhang Chaoyang, CEO of Sohu.com, a NASDAQ listed Internet portal.

"A lot of my classmates have plans to start their own businesses after studying in the UK, but I don't think it's a good idea to just blindly start your own business unless you have a really good idea," said Lily Lei, a young white collar working with a major multinational in Beijing who just got her master's degree in the UK last year. "A stable job is good for me, and I never thought about having a business. I guess that might have something to do with the environment I grew up in," she said.

Last year, China's GDP increased by 10.7%, an indication that the economy is ripe for entrepreneurial ventures. Incorporating entrepreneurial studies in universities may better equip graduates with the skills necessary to start a business, and Chinese society needs to better nurture those striking out on their own in the business world. However, perhaps it is the ideas that are the most important in the making of an entrepreneur.

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