Lin Min

linmin67@126.com

A RECENT survey has found that nearly half of Chinese university graduates would prefer to work in a government department or a State-owned enterprise (SOE), while only 4 percent said they wanted to start their own business.

The competition for government jobs has become increasingly feverish in recent years, with the number of graduate applicants jumping from about 600,000 in 2007 to a record 1.46 million in 2010. In many cases, thousands of people apply for one hotly pursued position. The survey by Qinghua University reaffirmed a public perception that government and SOE jobs provide better benefits and more job security. But more than that.

In a sense, the fervor mirrors the phenomenon of a “big government,” where officials are in a position to pocket “grey income” or even ill-gotten gains as overreaching power meets with little or nonexistent scrutiny.

On the other hand, the preference for SOE jobs reflects what many economists say is unfair State dominance of the economy, a phenomenon that is detrimental to innovation, growth sustainability and job creation as the private sector suffers from unfair competition.

Experts said college graduates lack entrepreneurial spirit partly because private companies could not compete on an equal footing with SOEs in terms of access to bank loans, markets and resources. Many potential entrepreneurs are also deterred by current levels of taxes and fees as well as red tape. A report by the World Bank in 2011 said start-up enterprises in China faced unreasonable bureaucracy and fees.

A China Youth Daily report last week, which drew wide attention, said business registration in Hong Kong can be done in about six days, at a cost of less than 2,000 yuan (US$315) and with just an ID document. Except a 16.5-percent corporate income tax, there are no other taxes and fees that burden enterprises on the mainland. While mainland entrepreneurs crack their brains trying to curry favor with government officials, Hong Kong company owners and managers do not have to “treat officials to a dinner.”

Mainland officials don’t hide their zeal in dining and wining with tycoons, but in Hong Kong, officials would be uneasy with hospitality from businessmen. Then Hong Kong Chief Executive Tsang Yam-kuen earlier this year had to apologize to the public after news media exposed his trips on Hong Kong tycoons’ luxury yachts and private planes. Rampant under-the-table deals between the powerful and wealthy on the mainland have toppled many officials and denied a level playing field for honest entrepreneurs.

Hong Kong has been rated as the world’s freest economy for 18 straight years by the U.S.-based Heritage Foundation. The Chinese mainland was far below on the list, ranking 138th in the study of 179 economies this year. A clean, transparent government and low taxation are major reasons behind Hong Kong’s appeal to multinationals.

The silver lining is that China still has much room for entrepreneurs. According to Zhou Tianyong, professor of the Party School of the CPC Central Committee, China has 11.66 enterprises for every 1,000 people, while the average standard of developing countries is 20 to 30 and that of developed ones is 40 to 50.

However, without a level playing field, reasonable tax rates and a clean and efficient government, Chinese people’s entrepreneurial potential cannot be fully tapped. When officials become public servants in the real sense, the fervor for civil service jobs will wane while the country’s entrepreneurship will grow.

With the economy sputtering three decades after reforms started, a new round of reform is now needed to put China on the track of sustainable growth by reinvigorating the private sector.

(The author is editor of the Shenzhen Daily News Desk.)