His success triggered much enthusiasm for similar enterprises. The Tsinghua Pioneering Park was established in August 1999, with more than half of the companies set up by young graduates. But the dot-com burst in 2000 sent many companies bankrupt. There are now only around 30 student enterprises in the park, with very few new ones.

    China launched preferential policies to encourage private enterprising among university graduates in 2003, waiving registration and administrative charges for one year. Provinces like Shandong even offered small loans for business pioneers.

    More graduates have once again begun to think of starting their own companies. However, they are faced with two difficulties. "What I worry most about is attracting qualified workers and good projects. Besides, the current office environment is not good," says Li. "I wish the government could increase the subsidy for graduate entrepreneurs and also give tax breaks.''

    The on-going global financial crisis is also having an adverse impact on these new companies. However, Zeng Hongyun, who graduated from Shanghai Jiao Tong University in July 2008, is not too worried. Unlike her schoolmates who become white-collar workers, she set up a business consulting company. Thank to fieldwork in a well-known firm since her sophomore year in college, she has gained much experience.

    In light of the financial crisis, last year many with Master's degrees and even PhDs set up their own businesses. But quite a number of them have no idea about the market and how to run the business in the initial stages. Since there is no special agency to guide such people, Zeng and her partner Wen Ye decided to fill this gap.

    "Although we ourselves are fresh graduates, we regard this as our advantage, because we are able to communicate with these young entrepreneurs easily. Besides, I believe the financial crisis will eventually ease and open up many opportunities in the market,'' says Zeng, who is quick to add that the company will need more capital to carry on.

Graduates in Lanzhou established a Clown Express Company.

Specific Guidance

    According to a report released by the Ministry of Education in 2004, of the 97 companies established by college graduates, only 17 percent were profitable. Only 30 percent of the companies run by college graduates had survived for more than five years.

    Li Junkai, deputy director of the Peking University Student Career Center, advises, "Student entrepreneurs should envisage and try to make up for their financial, technological and managerial weakness, while relevant administrative departments should give follow-up advice, providing additional funding and other services as needed.''

    Professor Klaus Haftendorn, global coordinator of project KAB (Know About Business), International Labor Organization (ILO), believes that appropriate entrepreneurship education is important for the survival of these new companies. "At present, there are few other countries in the world that have so many business opportunities as China. However, many business opportunities are neglected. This might be due to two reasons. First, in China, the infrastructure for business is not mature enough. The legal environment, the financial and investment facilities that are required for doing business are not good enough. Second, people lack systematic training about starting a business."

    The KAB entrepreneurship education project developed by ILO aims to cultivate entrepreneurship awareness and capacity among university students, and has currently been implemented in more than 20 countries.

    In fact, entrepreneurship education is known as the third passport by the United Nations Educational, Scientific, and Cultural Organization, after an academic diploma from school and an occupational qualification certificate. The U.S. has a complete system going from elementary and secondary school to undergraduate and post-graduate levels for students to avail of specific business opportunities.

    As students in China are exhorted to "study hard and find a good job" since childhood, many are lost when they try to branch off on their own. In China, less than 1 percent of college graduates start their own business, while in Europe and the United States, this figure stands at anywhere between 20 and 30 percent.

    However, entrepreneurship education is gradually catching on in China, with eight institutions of higher education including Tsinghua University, Renmin University of China and Shanghai Jiao Tong University launching pilot projects.