Once known mainly for cheap labor and manufacturing, since former Chinese President Hu Jintao’s announcement in 2006 that China would be a world leading producer of high-tech goods, the country has developed its capabilities in innovation through a series of regulations favouring entrepreneurship in China. The private sector grew more than 30% per year between 2000 and 2009 according to China Macro Finance, meaning that 25% of China’s adult population are entrepreneurs – twice as many as the US.
Students of the Global Entrepreneurship Program have the unique opportunity to spend a semester at Zhejiang University in Hangzhou, focusing their entrepreneurship studies on family business which dominates this world region, as well as complete an In-Company Business Project to develop their experience in Asian business issues.
History of entrepreneurship in China; from cheap labor to high tech
Up until 1978, China’s industry was dominated by State Owned Enterprises (SOE’s), with ‘entrepreneurship’ only existing as very small-scale activities in retail and services such as street vendors. Throughout the 1980’s, agriculture was de-collectivized, opening up the market to foreign investors and entrepreneurship was actively encouraged through the creation of patent laws and more investor-friendly environments. During the 1980s and 1990s, China focused its activity around exporting low-price goods to the international market and importing popular Western goods to the Chinese consumer.
In recent years, the Chinese government has put measures into place to develop innovation in order to provide a more sustainable future, away from its reliance on a cheap labor market. For example China has invested heavily in the development of its R&D and high-tech sector, introduced tax incentives and local investment opportunities and encouraged Chinese students to pursue engineering degrees.
Entrepreneurship in China: 25% of Chinese adults are entrepreneurs
According to the Global Entrepreneurship Monitor, nearly 25% of the adult population are entrepreneurs, twice as many as in the U.S. Well-known Chinese entrepreneurs include Jack Ma, the 18th richest man in the world and self-made billionaire and creator of Alibaba, a Chinese-based B2B marketplace website which currently serves over 79 million members from more than 240 countries. Ma has an estimated net worth of $29.7 billion, according to Bloomberg Billionaires Index.
However there are still many obstacles to the development of entrepreneurship in China. Due to relatively high corruption levels in the Chinese courts, private entrepreneurs who lack government support can be disadvantaged, with many small organisations usually losing court proceedings against large state firms, as well a highly bureaucratic and time consuming process for starting a business. More education is needed in entrepreneurship as well as access to business incubators. And on a cultural level, there can be an incompatibility between Chinese Confucian values such as obedience and respect for authority, which can be at odds with entrepreneurial values. However steps are being introduced to facilitate access to credit for private entrepreneurs and to create a more investor-friendly lending environment.
Future growth areas in entrepreneurship in China
According to research by Wharton University of Pennsylvania, three main sectors are set to see an increase in entrepreneurship in China in the near future:
- High Tech: In 2012, 45% of Chinese venture capital investment financed the high tech industry, totaling $4.7 billion. China has the largest number of Internet users in the world with over 640 million in 2014, over twice as many as the US and the world’s biggest online gaming market. But with thousands of Western websites such as Facebook and YouTube blocked, there are many opportunities to develop online products and services. For example, Robin Li, founder of China’s largest search engine Baidu holds over 80% market share, and is the second largest independent search engine in the world.
- Health Care: With its ageing population, there are many opportunities for entrepreneurs to offer innovative products and services to improve quality of health care in China.
- Renewable Energy: The Chinese government have set energy targets to generate 15% of the country’s energy from non-fossil fuel sources by 2020. Entrepreneurs have new opportunities to deliver innovative solutions within water treatment, lighting, gas-fire generation, and environmental services.
Why do the Global Entrepreneurship Program cohort study in Asia?
As a student of the global masters degree in entrepreneurship you have the unique opportunity to spend a semester studying entrepreneurship in China at Zhejiang University, located in the Hangzhou province. The purpose of this learning experience is to examine the entrepreneurial process outside of the Western world, in order to analyse the opportunities and challenges in the Asian business environment. This gives you an understanding of the challenges that international companies face, requiring you to develop your cultural awareness and cross-cultural communication skills.
During the semester in Asia, you will focus your entrepreneurship learning on family business, which according to Chen Ling, Vice President of Zhejiang University, accounts for over 80% of all private business holdings in China. This gives you a better understanding of how family business will evolve in the future world economy.
The cohort also have the chance to complete an In-Company project with a Chinese organisation during their time at Zhejiang University. This Business Project allows you to navigate the Asian business environment, put your intercultural skills into practice and gain practical learning and working experience in an international setting. Speaking of her semester in China, Alison Passat, Global Entrepreneurship Program graduate says: “You really need to live and experience the country to understand it. You can literally feel the country’s energy and growth, and it is definitely a rite of passage for any budding entrepreneur.”
Discover the program in entrepreneurship, from EMLYON, Zhejiang & Purdue University
About Zhejiang University – School of Management
Founded in 1897 as one of the earliest institutions of modern higher education, Zhejiang University has become one of China’s top national universities with solid research foundation, substantial technical strength worldwide and more than 500 000 alumni in more than 15 countries in the world.
Find out more: http://www.som.zju.edu.cn/en/