Young Chi­nese re­turn­ing from study over­seas are tak­ing ad­van­tage of govern­ment in­cen­tives and start­ing their own busi­nesses, as Zhang Yue re­ports.

China Daily (Hong Kong) - - CHINA -

For the past two and a half years, Li Guan­jiao has spent ev­ery day con­tact­ing po­ten­tial in­vestors, pro­mot­ing her prod­ucts and brain­storm­ing de­sign ideas with col­leagues.

“It’s ex­haust­ing, but great fun,” said the 28-year-old bud­ding en­tre­pre­neur, in a tele­phone in­ter­view she fit­ted in be­tween meet­ings with po­ten­tial back­ers.

Li stud­ied for a master’s de­gree in brand­ing at the Lon­don Col­lege of Com­mu­ni­ca­tions from 2012 to 2014, and landed a job in the fash­ion and de­sign sec­tion of a Chi­ne­se­lan­guage news­pa­per in the Bri­tish cap­i­tal straight af­ter grad­u­a­tion. There, she em­braced the United King­dom’s highly-de­vel­oped fash­ion, de­sign and print­ing in­dus­try.

“I no­ticed that many coun­tries, such as the UK and South Korea, have iconic paint­ing styles of their own, yet Chi­nese cul­tural im­ages and de­signs don’t seem straight­for­ward and iconic enough,” she said, ex­plain­ing how she had the idea of start­ing her own com­pany.

Her brand and com­pany is BCZW, which stands for the first let­ters of syl­la­bles of benchuziwu, or “prime merid­ian”, in pinyin. It pro­duces dec­o­ra­tive Chi­nese de­signs, which can be screen-printed on mugs, note­books, hats and T-shirts.

The com­pany, which has about 20 em­ploy­ees, is lo­cated near the To­day Art Mu­seum in Bei­jing, where mod­ern art is ex­hib­ited and Li can bet­ter pro­mote her prod­ucts.

In ad­di­tion, she has a ma­jor pro­mo­tion chan­nel via an on­line store on Taobao.

Li is one of a grow­ing num­ber of young Chi­nese with ex­pe­ri­ence of work­ing and study­ing over­seas who have re­turned to start busi­nesses.

Grow­ing en­thu­si­asm

In De­cem­ber, a re­port pub­lished by the Cen­ter for China and Glob­al­iza­tion and the Chi­nese Academy of So­cial Sciences showed that en­thu­si­asm for en­trepreneur­ship has soared among re­turnees in re­cent years.

More than 40 per­cent of stu­dents who re­turn to China to start busi­nesses opt to work in large cities such as Shang­hai and Bei­jing. Last year, more than 2.65 mil­lion stu­dents re­turned to China.

Li started her busi­ness in an en­trepreneurs’ in­cu­ba­tor es­tab­lished by Ren­min Univer­sity of China in 2015.

“The big ad­van­tage was that the in­cu­ba­tor pro­vided train­ing about en­trepreneur­ship and taught me many of the ba­sics about start­ing a busi­ness,” she said.

In 2010, China be­gan im­prov­ing ed­u­ca­tion re­lated to en­trepreneur­ship, and by last year, the Min­istry of Ed­u­ca­tion re­quired all uni­ver­si­ties to open cour­ses on in­no­va­tion and en­trepreneur­ship.

Many uni­ver­si­ties, es­pe­cially those in first-tier cities, also es­tab­lished en­tre­pre­neur parks and in­cu­ba­tors sim­i­lar to the one in which Li started her com­pany.

Dur­ing her first six months at the in­cu­ba­tor, Li learned how to ap­proach an­gel in­vestors, who spe­cial­ize in fund­ing star­tups, and in­sti­tu­tional in­vestors to give her busi­ness a sound start.

“It’s dif­fi­cult for us to get loans from banks be­cause we have lim­ited as­sets to use as col­lat­eral. There­fore, an­gels and in­sti­tu­tions have be­come the most im­por­tant way of rais­ing funds,” she said.

The lack of col­lat­eral is a ma­jor prob­lem for many young en­trepreneurs in Bei­jing. Some would be re­luc­tant to use their own as­sets, any­way.

“Even if I bought a house I would not use it as col­lat­eral with a bank. If I did that, I couldn’t af­ford to lose,” said Feng Lizhong, a 31-year-old en­tre­pre­neur who reg­is­tered a shirt brand in Bei­jing af­ter seven years study­ing and work­ing in Sydney.

This is where govern­ment poli­cies pro­vide as­sis­tance. Both Feng and Li man­aged to se­cure sub­si­dies from the Bei­jing govern­ment, which pro­vides in­cen­tives to en­cour­age re­turnees to start busi­nesses.

Li re­ceived 10,000 yuan ($1,490) when she started BCZW, while Feng was granted the same amount just two months af­ter he started his busi­ness.

“To be hon­est, the money came at a re­ally good time be­cause I had just paid a whole year’s rent for my store and hired my first em­ployee,” he said. “The sub­sidy helped my busi­ness achieve a smoother cash flow.”

About a kilo­me­ter from the south gate of Bei­jing Nor­mal Univer­sity is an en­trepreneurs’ park the univer­sity es­tab­lished for re­turnees in 2005.

It was one of the ear­li­est fa­cil­i­ties de­signed to help re­turnees start busi­nesses.

Al­though the park looks a lit­tle de­pilated, Zhou Xin, founder of Bei­jing De­fine Tech­nol­ogy Corp, is fond of it. He and his team have been lo­cated there since 2009, when he left San Francisco to start a com­pany in Bei­jing.

Busi­ness blind­ness

Back in 2009, the sub­si­dies that helped Li and Feng were not avail­able, and Zhou con­cedes that he was “kind of blind” when it came to build­ing up his busi­ness.

Born in 1976 in Yingkou, a small coastal city in the north­east­ern prov­ince of Liaon­ing, Zhou holds bach­e­lor’s and master’s de­grees from Ts­inghua Univer­sity in Bei­jing, one of China’s top schools, and also has a doc­tor­ate in physics from Stan­ford Univer­sity in Cal­i­for­nia, where he stud­ied from 2000 to 2005.

His five years of doc­toral re­search into tun­able diode laser ab­sorp­tion spec­troscopy tech­nol­ogy helped Zhou find a job in Los An­ge­les, earn­ing

The big ad­van­tage was that the in­cu­ba­tor pro­vided train­ing about en­trepreneur­ship ...” The in­cen­tives are not as ma­ture as other coun­tries’, but govern­ment sup­port is grow­ing rapidly ...” founder of Zhuhai Yun­zhou In­tel­li­gence

$120,000 a year, di­rectly af­ter grad­u­a­tion. Three years later, he had be­come the com­pany’s chief sci­en­tist.

“But that was it. It was a good job. I guess the word ‘sci­en­tist’ was listed as a top ca­reer when we were lit­tle,” Zhou said, with a laugh. “But that’s just it. You can clearly see what your work and life will be in 10 years, in 20 years, by the time you are 60.”

He needed a chal­lenge: “Ca­reers in for­eign coun­tries have lim­i­ta­tions and ceil­ings, at least if you are un­able to ex­press your­self freely enough due to the lan­guage dif­fer­ence.”

Zhou had the idea of start­ing a com­pany in Bei­jing while he was watch­ing Win in Chi- na, a pop­u­lar TV pro­gram about en­trepreneur­ship. His wife, who has an MBA from Stan­ford, sup­ported the idea, so they re­lo­cated to China, bring­ing their 18-month-old daugh­ter with them.

The prod­uct they had in mind was an ad­vanced gas-de­tec­tion in­stru­ment for use in coal mines.

The de­vice used laser-de­tec­tion tech­nol­ogy, which low­ered la­bor costs and raised the ac­cu­racy of de­tec­tion.

De­spite those ad­van­tages, the de­vice was a fail­ure be­cause Zhou hadn’t re­searched the Chi­nese mar­ket be­fore launch­ing it. As a re­sult, he didn’t re­al­ize that China’s min­ing in­dus­try was ac­cus­tomed to us­ing old equip­ment and there was lit­tle de­sire to change.

“I think the most dif­fi­cult thing for re­turnee star­tups is that your prod­uct needs to change cus­tomers’ habits. Hav­ing lived away from China for so many years, I ini­tially failed to study my tar­get cus­tomers’ be­hav­ior,” he said.

“The com­pany also lacked mar­ket­ing chan­nels. Coal mines are lo­cated far from Bei­jing, so the travel costs to in­tro­duce the prod­uct were huge,” Zhou said.

“All this hap­pened be­cause I had lived out­side China for many years so I was un­fa­mil­iar with the do­mes­tic mar­ket.”

In ad­di­tion, the de­vice had to un­dergo a large num­ber of tests and re­views be­fore it could be used in coal mines, which took far longer than Zhou had ex­pected.

Mean­while, pro­tec­tion of his in­tel­lec­tual prop­erty rights was an­other key con­cern. Those fac­tors prompted Zhou to con­duct ex­ten­sive mar­ket re­search.

Now, his clients are mostly elec­tric­ity power plants where the de­vice is used to help meet en­vi­ron­men­tal pro­tec­tion stan­dards.

Govern­ment poli­cies helped as his com­pany was tak­ing shape. Zhou re­ceived more than 2 mil­lion yuan in sub­si­dies from the cen­tral govern­ment and the Bei­jing mu­nic­i­pal govern­ment, while the govern­ment of Haid­ian district helped by of­fer­ing him a lower rent for his busi­ness premises.

Prime lo­ca­tion

Un­like many young en­trepreneurs, when 33-year-old Zhang Yun­fei started his busi­ness, in 2010, he chose to lo­cate the com­pany in Zhuhai, a coastal city in South China’s Guang­dong prov­ince.

Zhang, who has a master’s in me­chan­i­cal engi­neer­ing from the Hong Kong Univer­sity of Sci­ence and Tech­nol­ogy, chose Zhuhai for three rea­sons: lower costs; the fi­nan­cial in­cen­tives pro­vided by the lo­cal govern­ment; and lo­ca­tion, be­cause his work con­cen- trated on the re­search and devel­op­ment of un­manned sur­face ves­sels and sub­marines.

“The in­cen­tives are not as ma­ture as other coun­tries’, but govern­ment sup­port is grow­ing rapidly com­pared with other coun­tries, es­pe­cially sup­port for sci­ence-tech in­no­va­tion busi­nesses,” said the founder of Zhuhai Yun­zhou In­tel­li­gence.

In April, the State Coun­cil, China’s Cabi­net, is­sued guide­lines about com­pre­hen­sive sup­port for re­turnee star­tups. At present, about 350 en­tre­pre­neur parks around the coun­try house 27,000 com­pa­nies and 79,000 re­turnees.

‘Pace and peo­ple’

Pierre Bi co­founded Aeris Clean­tec, which makes “nextgen­er­a­tion” res­i­den­tial air con­di­tion­ers, in Bei­jing last year. He thinks young en­trepreneurs are at­tracted to China be­cause of “the pace and the peo­ple”.

“Europe is too com­fort­able. Most peo­ple avoid chal­lenges be­cause they want a steady ca­reer path,” said the 20-some­thing Swiss cit­i­zen, whose fa­ther hails from the In­ner Mon­go­lia au­tonomous re­gion.

“Right now, it’s sum­mer in Europe, so noth­ing is re­ally mov­ing. Here, peo­ple are aware of what it means to work with a startup, which means long hours and great un­cer­tainty.”

His busi­ness part­ner, Liu Shuo, a 34-year-old Chi­nese, used to work for a Bel­gian brew­ing com­pany.

The pair met over­seas and then de­cided to move to Bei­jing be­cause they be­lieved their fledg­ling com­pany would have a great fu­ture in the cap­i­tal.

“China is mov­ing away from tra­di­tional eco­nomic driv­ers to con­sump­tion-led busi­nesses with a strong fo­cus on en­ter­tain­ment and health. I am pretty con­fi­dent that the shift will con­tinue,” Bi said.

Here, peo­ple are aware of what it means to work with a startup ...”

Con­tact the writer at zhangyue@ chi­


A re­turnee from the US dis­plays the model trains he sells on his on­line store in Shang­hai.


A farmer with sev­eral years’ ex­pe­ri­ence of keep­ing sheep in the US founded a sheep farm in He­bei prov­ince last year.

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