Context: As the world’s most populous nation, China also has one of the largest groups of youth at over 185 million people. The most recently reported youth unemployment rate of 10.5 per cent in 2014 is the highest recorded since 1991, indicative of the challenges young people face in securing employment. Another challenge is that the unemployment rate among youth with a university level education or higher is double the rate of those without an advanced education. In search of alternative forms of employment, youth entrepreneurship has gained interest in recent years. Furthermore, the Government has shown support for entrepreneurship with the creation of a venture capital fund worth $6.5 billion in 2015.
Implementation of programme/initiative: The Youth Business China Project (YBC) was launched in November 2003 by the All China Youth Federation (ACYF) and the Central Committee of the Communist Youth League. The project aims to help Chinese youth start their own business through increased access to resources, guidance and by providing a business network. Participants can receive interest-free start-up funds ranging from 30,000 to 50,000 RMB, along with professional advice and technical support for the first three years of their business. Initial funds started at 10 million RMB, and these sponsored 171 youth.
Main challenges: A challenge many young entrepreneurs in China face is a societal attitude that young people are not capable of starting their own business and that entrepreneurship is not serious work. These attitudes inform the education and finance systems that at times are not supportive of youth entrepreneurship. Without an education that promotes entrepreneurship, even those who are interested do not know where to start. Other challenges are the business community often undervaluing the potential of youth and there being limited social networks that facilitate entrepreneurship.
Results achieved: From 2003 to 2010, Youth Business China helped youth start 1,100 micro and small enterprises. Small businesses supported by YBC generated more than 12,000 job opportunities and trained over 200,000 youth. The survival rate among businesses was over 97 per cent, and 88 per cent made on time repayments of debt. YBC established 18 local offices and 22 service centres across China. In terms of gender parity, 45 per cent of participants were female.
Moving Forward: While YBC has already achieved great success in fostering youth entrepreneurship, coverage of the programme could be further expanded into rural areas, where some of China’s most disadvantaged youth reside. Another way YBC could expand its efforts is by targeting high school students and providing them with information about entrepreneurship and skills training, which increases awareness and combats negative societal attitudes.
Replicability: Unlike other programmes that give youth grants to start their own business, YBC’s use of interest-free loans gives the young person a greater stake in the project, since they must eventually pay back the loan. Providing opportunities for youth to expand their social networks is beneficial for participants and decreases their long-term reliance on the project.
References:
http://www.ybc.org.cn/
http://www.alanbarrell.com/uploads/YBC-Achievements.pdf
Project Details
Date: September 22, 2016