Tech Start-ups All The Buzz, But Many Young Chinese Prefer Stable Government Jobs

As governments across China roll out new measures to boost employment and entrepreneurship on the back of an AI-driven tech boom, many young people, worried that weak demand and a sluggish economy make starting a business too risky, remain drawn to stable government jobs.

Seven central government ministries, including the Ministry of Human Resources and Social Security and the Ministry of Education, issued a joint guideline late last month urging local governments to promote employment through entrepreneurship.

The initiative targets groups with high unemployment rates, including recent university graduates, migrant workers and retired military personnel.

The guideline calls for the rapid development of specialised training programmes in emerging sectors such as the digital economy, artificial intelligence, the green economy, and the “silver-hair” economy that caters to the growing ranks of the elderly. It also emphasises enhancing entrepreneurial skills through innovative “skills + entrepreneurship” training models.

It highlights the importance of government guidance and market orientation, encouraging the flow of venture capital and other resources into business incubation platforms to foster high-quality small and medium-sized enterprises and create jobs. Financial support will be made available to university students and recent graduates who translate innovations into viable businesses.

President Xi Jinping emphasised the importance of the tech sector at a high-profile meeting with leading Chinese entrepreneurs in Beijing last month.

DeepSeek, China’s hottest tech start-up, is offering dozens of jobs related to research and development in artificial general intelligence at its home base in Hangzhou, Zhejiang province, and in Beijing, according to earlier reports.

Several local governments have reaffirmed their commitment to supporting tech talent and student entrepreneurship.

Last month, the Guangzhou Development Zone in Guangdong’s provincial capital introduced a risk tolerance mechanism for its 5 billion yuan (US$688.8 million) science and technology innovation and entrepreneurship investment fund. The fund prioritises strategic emerging industries such as biopharmaceuticals, new energy and new materials, as well as future industries like the low-altitude economy, aerospace and quantum technology, and allows losses of up to 100 per cent on seed and angel investments to be covered by risk reserves and investment incentive funds over a period of two years.

In Hunan province, the authorities launched the first batch of 500 million yuan in entrepreneurial investment funds in December to assist university students and recent graduates at different stages in their start-ups. If a start-up fails, as long as it has operated legally, honestly and in good faith, the government-backed fund will absorb the loss.

The governments of multiple regions, including the provinces of Zhejiang and Guangdong, have introduced policies that cover small loans if student and graduate entrepreneurs fail. In addition, those starting businesses in industries such as domestic services, elderly care or modern agriculture will receive both entrepreneurship and employment subsidies.

Sheng Ran, who is studying engineering at a top Chinese university, said policy and financial support meant that starting a business in one of China’s “core technologies” – such as artificial intelligence, nuclear power and new materials – had promising prospects.

“The team members at many outstanding Chinese artificial intelligence and robotics companies are very young,” he said, adding that entrepreneurial opportunities for university graduates in manufacturing and other traditional businesses were limited, and “even the once highly sought-after fintech sector is facing challenges”.

Shen said he and his classmates were likely to pursue postgraduate or doctoral studies and then seek opportunities to commercialise their research that were offered by large state-owned enterprises.

However, many university students and recent graduates remain hesitant about embarking on an entrepreneurial path, believing that the risks today are far greater than during the country’s “mass entrepreneurship and innovation” boom of the 2010s.

“There have been similar subsidies and incentives for years, but today’s students prioritise stability more than before,” said Lucas Lu, from Zhejiang, who is currently studying at a university in Kuala Lumpur, Malaysia, after previously studying in the United Kingdom.

Unlike their counterparts a decade or two ago, young people in China today are less willing to take risks due to high levels of economic uncertainty, Lu said.

“With global instability, rising raw material costs and weak domestic demand, making a profit is extremely difficult,” he said, “Given the current situation, I prefer to wait and see rather than rush into entrepreneurship.

“If we could go back to the kind of environment where everyone is upwardly mobile in 2017 and 2018, I might give it a try. But now, being an English teacher in a public school or landing a stable job in a state-owned financial institution looks more appealing.”

Young people who plan to start their own business need to realise that the economic landscape has changed, said Zeng Zhao, a serial entrepreneur with 10 years of business experience in fintech and the wider tech industry in Shenzhen.

“Even companies that have proven themselves to have stable operations are struggling to secure new funding rounds – profitability last year does not guarantee investor confidence this year,” he said.

“Moreover, local governments used to be an important source of funding for many start-ups in emerging industries, but they are now facing severe financial constraints, leading to uncertainty about incentives and financial support.”

The challenges posed by weak domestic demand have also made it difficult for small businesses to survive, further discouraging aspiring entrepreneurs.

“I ran a tea shop for two years, but it closed in January because my revenue couldn’t cover rent and material costs,” said Ella Chen from Guangzhou. “These policies sound great, but I haven’t benefited from any of them.

“I started my business after losing my job, but because of the start-up, I lost my eligibility for unemployment benefits.”