A recent survey, commissioned by China Central Television (CCTV)
and Tsinghua University, has shed light on latest trends in wealth
creation in China. The survey polled 3,200 people in 31 provinces,
municipalities and autonomous regions, to create a bird's eye view
of people's experience, wealth and outlook on life.
Seizing the right market opportunity
According to the survey, finding the right market opportunity
lies at the heart of success in this area, along with market
investigation and support from families and friends. This
chronicles changes from back in 2005 when a similar survey listed
the most important factors as being team work, capital management
and risk control capacity.
Capital transfer and fierce market competition vied for the top
position in leading to failure in venture capital operations but
were tailed by poor business management. However, it seems that
prospective businesspeople are wising up, with the number of people
reporting financial losses from this factor accounted for less than
25 percent of those surveyed, down from 2005.
Those surveyed who were also successful in business attributed
this good fortune to the following: familiarity with industrial
operations (32.28 percent), mastering vital technologies (20.03
percent), and good knowledge of sales channels (19.92 percent);
with adequate funding falling to a lowly 4.62 percent.
Gao Jian, a Tsinghua University professor, explained that most
pioneers face a cash-flow problem in the early days of their
ventures, but that a combination of knowledge and resources will
help them overcome this problem and become better able to seize
entrepreneurial opportunities.
Satisfaction index of wealth creation and index of
wealth creation level
Southwest China's Chongqing Municipality topped the indexes for
wealth creation across the scale with Shanghai finishing second for
the level of wealth creation but dropped into eighth for
satisfaction thereof. Rural provinces were unsurprisingly the
hardest-hit with Ningxia Hui Autonomous Region, Gansu, Guangdong and Jiangxi provinces bringing up the rear.
Surprisingly, Guangdong scored low in wealth creation satisfaction
terms despite being one of the richest provinces in the
country.
Gao attributed this factor to unreasonable expectations among
the people whilst Chongqing, Sichuan and Yunnan with more realistic models on the
ground scored high in satisfaction terms despite having only
average enterprise environments.
Traditional processing industries
The survey also outlined five industries considered
representative in pioneering, namely retail, industrial processing,
agricultural processing, catering, and information service
industries. Comprehensively, agricultural and industrial processing
industries enjoyed the highest index for wealth creation level
while the wholesale and retail industry lagged behind the rest.
This can be interpreted from an operational viewpoint since the
agricultural and industrial processing industries rank high in
terms of sales, profit margin, investment environment and
government support, while the catering industry ranks lowest in
terms of sales and service.
Public image also shines favorably on the agricultural and
industrial processing industries which are seen as being
law-abiding as opposed to the information service industry.
Prof. Gao pointed out they are also favored in terms of
government policy and financial expenditure since the impact of
traditional industries still dominates banking and governmental
influence.
Entrepreneurs: young and starting from small
business
People aged between 26 and 35 are the main body of the
pioneering force, accounting for 50 percent of those surveyed,
followed by those aged between 36 and 45 (24.28 percent), and then
those aged between 18 and 25 (20.55 percent), each starting out
with an initial fund of under 50,000 yuan (US$6,557).
The top three main factors in promoting business creation
included: to fulfill life goals, profit and then survival, the
survey said. The top five virtues sought by entrepreneurs were:
honesty and faith, seizing opportunities, creation and innovation,
having communication skills and being a risk-taker.
However, failures are lurking for every industry. Beyond the
issues of funds and market supplies, the agricultural and
industrial processing industries face a lack of up-to-date
technology, the wholesale and retail industry consistently struggle
with correct locations whilst the information services and garment
processing industries wrestle with a dearth of technology and
qualified personnel.
(China.org.cn by Li Jingrong, June 15, 2007)