The mounting pressure of unemployment demands a change of the current business registry system in favor of young people who are going to start their own business, experts say.
"The unemployment problem in China now is nothing like what the registry system was designed for. Hundreds of jobs go unadvertised, or unemployed laborers are not qualified for them because of lack of training," said Su Bo, a senior official with the State Development and Reform Commission in charge of small and medium-sized enterprises.
"What we lack is more new small enterprises and more jobs created by them," Su said at the China Youth Business Forum held in Beijing on Tuesday.
Some 24 million people are waiting for jobs at present, including hundreds of thousands of new laborers flooding into the market every year, according to Su.
Latest statistics show there are still 700,000 college graduates who have not yet landed a job this year.
Next year, 2.8 million college students will graduate; the number will be 3.2 million in 2005.
Self-employment is an option the government is encouraging these young people to consider.
Shanghai is one of the cities that has done well in this field, with a school built to offer free entrepreneurship courses to unemployed youth.
"There are at least 1,000 young people like me studying there to learn things like writing a business plan," said Liu Jiangang, a young man who lost his sales job when the private company he worked for closed its doors for good.
Liu, originally from Inner Mongolia, spent his college years in Shanghai and did not give up his dream of staying there. He chose to change his destiny by creating a business and becoming his own boss.
He went to the free school and came up with the idea of opening a company offering home services for foreigners in the metropolis.
Just this week his business plan has been chosen by a project called Youth Business China, which will provide him with seed money of US$8,500 and partner him with a successful entrepreneur to be his mentor.
Still, Liu is not sure whether he will establish his own firm smoothly as there are many limits and obstacles on his way to becoming an entrepreneur.
Su admitted that some of the government's regulations go against its policy of supporting self-employment.
"So far, it's still not permitted to register a company at home, and there are still strict requirements for registry capital, usually at least 300,000 yuan (US$36,000)," he said.
After Su talked with officials at the State Administration for Industry and Commerce, they agreed the registry management regulation on privately or individually-owned business is no longer satisfying the current development of economy.
"Some policies were designed to achieve a certain goal that goes against our current goal of encouraging the development of small and medium-sized enterprises,'' he said.
"Because the old goal runs counter to the current one, we need to discard it."
Su said right now the commission and the State Administration for Industry and Commerce are studying how to alter or abandon these policies "in order to make our policy comply with our government's trend."
Youth unemployment has become a concern in many countries, prompting the United Nations to organize the Youth Employment Network to help tackle the problem.
According to statistics from the network, youth are two to three times more likely to be unemployed than adults.
China recently introduced a new model for assisting youth to start business, based on a British project called Youth Business International. It stresses the social responsibilities of entrepreneurs and their role in the project.
(China Daily November 29, 2003)
