Justin Chan at Insight writes:
After years of growing governmental support, entrepreneurial spirit in China has now reached a fever pitch. Opportunities are everywhere but diligent research, the right strategy – plus passion and luck – are the factors determining boom from bust.
If you need proof that China is now one of the most capitalistic countries on the planet, consider the dramatic shift away from giant state-owned enterprises (SOEs) toward small and medium enterprises (SMEs) over the past 30 years. In 1978, SOEs contributed 78 percent of China's total industrial output, a figure that dropped to 26 percent just ten years ago. Today, according to a 2006 report commissioned by the National Development and Reform Commission (NDRC) and the Ministry of Commerce, SMEs in China now make up 99.6 percent of total enterprises in China, and fuel nearly 60 percent of the country's GDP.
Although private businesses began their emergence in the mid 1980s (such as the government's experimental approval of private business ownership in Wenzhou, which later spread to other cities), they were not officially granted legal status until the 1988 Amendments to the PRC Constitution. Today, private business ownership is actively encouraged by the Chinese government. While international entrepreneurs generally do not enjoy these new government perks, growing numbers are still entering the China market. They say the main challenge in launching a start-up in China now is simply to be on the right side of the risk-versus-reward equation.
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