Grads need more help to start own ventures

Special Report:Global Financial Crisis

by Ma Hongman

BEIJING, April 24 -- The country should take more practicable and operable
measures to help fresh graduates start their own businesses.

The "zero down payment" lending policy adopted by the government, aimed at
encouraging graduates to jump-start their ventures, has encountered a setback in
Shanghai. According to a recent survey conducted on six graduating Shanghai
students, who chose start their own enterprises under the center's preferential
policy, all of them failed to open business accounts in banks, even though they
managed business licenses.

Under the influences of the global financial crisis, China's social
contradictions involving employment have become increasingly prominent. The
"zero down payment" policy was basically aimed at expanding employment channels
for fresh graduates and offering them a chance to make use of their knowledge
and tap their own potentials.

However, relevant State departments still need to take some comprehensive
and considerate measures for the policy's smooth and effective implementation.
Also, we should not pin more hopes on profit-pursuing commercial banks to play a
role, which the government should shoulder.

In the context of the economic slowdown at home and abroad, this year's
graduates are confronted with a particularly harsh employment environment. It is
reported that by the end of March, a famous high-learning institute in Shanghai,
a locomotive of China's economy, still has 30 percent of its graduating students
whose working intentions remain unresolved. In the previous years, 100 percent
of the institution's final year students usually found jobs by January. Worse,
less than 20 percent of graduating students in some other high-learning
institutes have landed job contracts as yet.

To ease growing employment pressures, the country should lower the
threshold for graduates to start their own businesses, which is expected to
inject a new vitality into the slowed national economy. To this end, a good
policy on *** alone is not enough.

When it comes to the "zero down payment" policy, the government still needs
to take workable measures to seek active coordination from relevant parties,
domestic commercial banks in particular. Otherwise, the policy will be reduced
to only an attractive pie, out of reach.

As it turns out, most graduates keen on setting up their businesses have
encountered various hurdles in the process of opening an enterprise account, a
necessary step to start a new business. For instance, all domestic commercial
banks demand that any one who wants to start a business must first deposit no
less than 20,000 yuan in his or her bank account, and must pay a procedure fee
ranging from 2,000 to 3,000 yuan.

For the 20-something graduates, who have just left their ivory tower and
have no strong economic power, such an exorbitant economic requirement is
undoubtedly equivalent to an insurmountable jolt in their dream of a business
venture.

In fact, commercial banks cannot be blamed for their lack of cooperation,
given that their overwhelming purpose is to pursue maximum profits at low risks.
Any of the existing risk evaluation systems set up by domestic commercial banks
are enough to persuade them to avoid lending to economically weak graduates.

Under these circumstances, any preferential policies launched by the
country's industrial and commercial authorities due to the lack of a necessary
risk guaranteeing system, would prove useless.

The setback most graduates have suffered is also an essential reflection of
the hardships facing the country's private-run enterprises. It is common that a
large number of private enterprises have been marginalized in the country's
preferential policies in support of industrial development.

A typical case is in the field of refined oil. According to a regulation
promulgated by the Ministry of Commerce, the wholesale of the country's refined
oil should be open to all domestic enterprises, state-run or private, as of Jan
1, 2007. But the regulation also stipulates that only those enterprises with an
oil storeroom of 10,000 cubic meters and a registered fund of 30 million yuan
are qualified to start such a business. The two requirements undoubtedly deprive
almost all of the less powerful private oil enterprises.

As the global financial crisis continues to affect the Chinese economy,
domestic private sectors' potential should not be understated anymore. The
country's enormous domestic savings, as high as 24 trillion yuan, should flow to
these sectors and help boost the national economy.

Developing private sectors will not only help promote a diversified market
pattern, but will also contribute much to the improvement of market vitality. We
should not suffocate any possibility of our young graduates becoming the next
Bill Gates and Michael Dell, both of whom have set a good example for young
graduates to create a new business empire after starting from scratch.

To encourage the country's youth to start their own businesses, a policy on
*** or slogans without any substance is not enough. A risk guarantee fund,
including risk investment and private equity, should be set up to dispel the
concerns of commercial banks when extending loans to young graduates.

The author is an anchorman with China Business Network, a TV network based
in Shanghai.

(Source: China Daily)

Commentary: No need to fret about Chinese "going-out"

By Mo Huaying, Fei Liena

BEIJING, April 22 (Xinhua) -- As China's reform and opening-up deepens, an
increasing number of Chinese companies have started to leave their native land
in search of international expansion.

This "going-out" trend has caught the attention of many people in other
countries. Some of those people react with applause, others with concern and
worry.

As a Fujitsu Laboratories researcher recently said, China's opening-up
policy consists of two parts _ inviting-in" and "going-out." The two-way flow
has become normal in China's foreign trade, especially after China joined the
World Trade Organization in 2001.

Now that China's market is opening wider, its economy is becoming more
globalized.

In the process of "going out," Chinese enterprises have become an
increasingly larger member of the international trade family, inevitably with
both painful and worthwhile growing experiences.

Chinese enterprises have been walking at a brisk pace since going out into
the world, as Time magazine has noted. Like other companies expanding overseas,
the Chinese have suffered setbacks and paid prices. However, they have also have
learned how to participate in international trade.

Chinese companies are just like foreign businesses. Their "going-out"
moves, or what we call overseas expansion, are normal in the current global free
trade system. It's neither a "surprise" nor a "threat."

Tim Harcourt, chief economist of the Australian Trade Commission, gives an
example.

In the 1990s, cash-rich Japan flooded Australia with investments, causing
worry and concern in the country. The Australians relaxed, however, after seeing
the advantages, such as increased employment and new products and technology,
that the Japanese investments brought.

The same thing will happen with Chinese investments, Harcourt said. He said
that after several years, Australians will again realize that their concern is
unnecessary. Instead, he said, they might actually applaud and welcome the
investments.

Hand in hand with the going out are opportunities, not only for the Chinese
companies, but also for the target countries, especially those with businesses
mired in the economic quicksand of the financial crisis.

Chinese investments can help those countries ease or even rid themselves of
their current financial difficulties. The investments can also help the products
from those countries enter other markets more smoothly and help local
communities increase employment.

A Reuters article recently pointed out that a boost last month in China's
industrial output, along with a record rise in new lending, gives credence to
the idea that the bottom of the financial crisis may not be far off.

"It does seem that confidence is slowly growing among investors that the
worst may be over for the global economy," said Hideyuki Ishiguro, an executive
with Okasan Securities in Japan.

In addition to supporting the world economy, the "going-out" strategy of
Chinese companies also aims to increase investments and construction in African
nations, especially those less developed.

To see the "going-out" policy with a cool head means people abroad should
look at China's development and globalization with an objective and long-term
vision.

"China needs to enter the world market for further development," said
Japan's Toyo Keizai Weekly. "Though some people talk about 'China threat,' China
still needs to develop."

The Wall Street Journal also pointed out that the world should welcome
China's companies and investment in the same manner as that from other
countries. After all, that is the essence of international free trade and
competition.

China: key currency countries need watching

Special Report: Boao Forum For Asia
2009

BEIJING, April 19 -- Premier Wen Jiabao said
on Saturday that the economic polices of countries which issue global reserve
currencies require closer supervision as part of building a diversified
international monetary system.

Wen and central bank governor Zhou Xiaochuan also cautioned against jumping
to the conclusion that China is already on the path to economic recovery, after
data issued on Thursday showed signs of an upturn in momentum.

Chinese Premier Wen Jiabao gives a
keynote speech at the opening plenary of Boao Forum for Asia (BFA) Annual
Conference 2009 in Boao, a scenic town in south China¡¯s Hainan Province,
April 18, 2009. The BFA Annual Conference 2009 opened here on Saturday
with the theme of ¡°Asia: Managing Beyond Crisis¡±. (Xinhua/Ma
Zhancheng)
Photo
Gallery

Wen's currency comments, an apparent reference to U.S. economic management that
Beijing has blamed in part for the global financial crisis, were twinned with a
pledge to promote more international use of the Chinese yuan.

Wen has expressed concern in recent months about the
safety of Chinese investments in U.S. dollar assets.

"We should strengthen the supervision of the economic policies of the main
reserve currency economies and push forward the establishment of a diversified
international monetary system," he said in his opening address to the Boao Forum
for Asia, held annually in the Chinese island province of Hainan.

It was the second time this month that China has made such an appeal,
following President Hu Jintao's call at the London G20 summit earlier this month
for the International Monetary Fund to strengthen its oversight of reserve
currency-issuing economies.

Long-term Solutions

China caused a stir in March when central bank chief Zhou suggested the
idea of reducing reliance on the U.S. dollar as the world's primary unit of
foreign exchange by developing the Special Drawing Rights (SDRs) issued by the
IMF.

But at the London G20 forum, China did not call for immediate discussion of
the subject.

Speaking at the Boao forum on Saturday, Zhou said that his proposal on SDRs
was intended mainly to contribute his thoughts on the root cause of the
financial crisis and what needed to be done in the long run to prevent such
situations in the future.

He was not suggesting that drastic changes to the financial system needed
to be taken in the short term, Zhou said.

"It's just like treating a patient. First we need to make a diagnosis. Then
comes treatment," Zhou told the forum.

"But right now, not all the doctors have the same diagnosis....
Unfortunately, it seems that there is still no consensus among various countries
about the source of the financial crisis," he said.

Premier Wen said China would look at expanding its currency swap agreements
that are seen as a step toward eventually *** the yuan more of a global
reserve asset.

"We should give full play to bilateral currency swap agreements and will
study expanding currency swaps in scale and to more countries," he said.

China's central bank has signed six swap deals since mid-December, totalling 650 billion yuan ($95 billion), with countries from Argentina to Indonesia.

Leaders take a family photo before the
opening plenary of Boao Forum for Asia (BFA) Annual Conference 2009 in
Boao, a scenic town in south China¡¯s Hainan Province, April 18,
2009.(Xinhua Photo)
Photo Gallery

Strong China

Wen highlighted China's relative strength in the face of the global
financial crisis and told the audience of Asian government and business leaders
that Beijing stood ready to support other countries through the difficult times.

"A series of economic stimulus measures adopted by China have shown initial
results and there have been positive changes in economic performance, which has
been better than expected," he said.

His wording was nearly identical to that at a State Council, or cabinet,
meeting this week after China said its economy grew at 6.1 percent in the first
quarter from a year earlier.

While that was the weakest quarter in year-on-year terms since records
began in 1992, analysts said it represented a rebound in quarter-on-quarter
growth.

But Wen also said that China would still err on the side of the caution,
sticking to its active fiscal policy and moderately loose monetary policy --
which, in practice, have meant a surge in government spending and bank lending.

"We would rather over-estimate the severity of the situation and fully
consider difficulties in *** longer-term preparation for bigger
difficulties," he said.

Central bank governor Zhou also emphasised that, even though there were
positive signs that the economy is starting to recover, China is still in the
stage of struggling against the global economic slowdown and financial crisis.

"The situation of the crisis is changing constantly. We need to tweak our
policies in line with the changing stage of the crisis," he said.

Liu Mingkang, chairman of the China Banking Regulatory Commission, added at
Boao that he was cautiously optimistic about the economic outlook and thought
banks had adequate provisions to cover any potential rebound in bad loans.

Zheng Xinli, a senior Communist Party adviser, told reporters in Boao that
he thought the economy had already hit bottom and would start to pick up steam
in the second quarter.

But asked if the government would be able to hit the 8-percent GDP growth
target for the year, Zheng said: "I think it is not guaranteed."

(Source: China Daily)



Premier: China's stimulus package plan
paying off

BOAO, Hainan, April 18
(Xinhua) -- China's economic stimulus package plan is already paying off, and
positive changes have taken place in the economy, Chinese Premier Wen Jiabao
said Saturday.

"The situation is better than expected," Wen said at the
opening ceremony of the Boao Forum for Asia annual conference 2009. Full story