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Chinese students show business acumen
Cheng Yan could not conceal her excitement when waiting for her turn at the rehearsal. That day, after a nerve-wracking 30-minute closed-door interview, her team took the gold prize in the Fourth "Challenge Cup" National Entrepreneurship Competition for College Students. And they also got the opportunity to showcase their plan to competitors from 77 universities the next morning, an honour reserved for just five plans among the 30 first-place winners. The competition was jointly organized by Xiamen University and the Xiamen municipal government. It started in Xiamen University on November 7 and lasted for three days. Forty entrepreneurs, venture capitalists and other professionals were involved in evaluating the 100 plans from 77 colleges across China. The biennial entrepreneurship competition is designed to bring out the innovative and entrepreneurial spirit in college students. Entrants are formed into multidisciplinary teams. Cheng's four-person team treated it as just another round of competition, paying careful attention to every tiny detail while on stage. The audience are equally competitive as the teams and there was larger panel which did not hesitate to pitch tough questions. The event turned out to be a very intense four hours. The judges picked apart every aspect of the plans, from the breakdown of the start-up costs to potential lawsuits. Veterans as they were, their questions proved very hard. But Cheng was wearing a bright smile all the time on the stage. Her soft voice means she does not match the stereotype of a PhD student studying chemistry. She is the core of her team, being the inventor of a disposable ultrathin battery for cell phones. Her business plan is to market this patent-protected product. "I am more market-oriented with this experience." said Cheng. "It is vital for a researcher to offer something really valuable." Fellow team member Dong Xin touched on the enhanced communication resulting from the multidisciplinary combinations of competitive teams. "It is a peculiar dysfunctional quality of scientific and technical institutions that students tend not to communicate too much," said Dong, adding that "the competition breaks the ice." He is a sophomore, the youngest in the team and probably of all the teams, but he is obviously mature for his age. "Early this year, Fudan University held an exhibition of academic and scientific achievements by our fellow students. Those with an interest in a certain field of technology link up and put together a business plan." Dong recounted. The students agree, and for many the contest offered them a chance to learn something which cannot be provided by their education. "This makes the material from class come alive," said Lin Gengxu from a polytechnic college in South China's Guangdong Province. A runner-up in the region, his team did not make it to the national finals. "This is the first time we take part in the business plan competition," he explained, adding "we will come back." He was sent by the college to observe the competition. Li Lin, whose team was knocked out at the semi-final, came to Xiamen out of personal interest. "The competition attracts the most talented students from all over China. It is a valuable experience to get to know them." As a postgraduate in Henan University of Technology, Li had successful trials over the past two years by setting small profitable businesses during the summer holidays. "Running a business is something I've always wanted to do," he said. On November 7, the first day of the four-day event, 27 business plans were scooped up by venture capitalists who may want to develop the ideas. A winning team, Lixing Group from Xiamen University sold their plan to an enterprise for a good price. Lin Liwen, the team leader said: "We are not capable of carrying on a project demanding tens of millions of yuan in investment." Their plan aims to promote a nutrition medicine that helps patients to recover, which is at present not being produced in China and available only by importing it from Germany. There are entrepreneurs who are more determined and ready to transform ideas into business. And business prospects come at any time even without entry to the national final. In April this year, two companies were born during the Xiamen University Business Plan Competition. MBA student Li Xiaojun got 800,000 yuan (US$96,640) for his speedy test for second-hand batteries. Another start-up was based on innovative ink printing technology invented by graduate student Zheng Qianjian. The two fledgling businesses are now housed in the university's incubator centre, where they enjoy the free rent of a 60-square-metre office for six months. The centre also offers business advice, work through government licensing and permit procedures and helps them find information about financing. Firms' incubator Since the first national entrepreneurship competition was launched at Tsinghua University in 1999, China has witnessed an upsurge in new businesses originating from the nation's campuses, yielding promising firms like Asee, Sotrip and Xunfei. Asee is a Qingdao-Beijing-based projection industry pioneer. It evolved from Beijing Shimeile Tech Inc, the winning team in 1999, which then obtained contractual venture capital of 52.5 million yuan (US$6.3 million) from Shanghai No 1 Department Store Corporation and Tsinghua Xingye Investment Co. In 2000, it was snapped up by Qingdao-based Aucma Group, one of the largest home appliance manufacturers in China. Asee was considered a great success that led to a craze for venture seeking among Chinese college students. The "Challenge Cup" has been gaining enormous momentum ever since then. During the third competition hosted by Zhejiang University in 2002, 10 out of the 60 final teams ended with a total contractual investment of 93.3 million yuan (US$11.24 million). There would have been no Silicon Valley in the United States without ventures taken by students. The renowned MIT Entrepreneurship Competition is the nation's hottest seedbed of entrepreneurial success. Chinese counterparts are apparently inspired by pioneers like Asee. But there are few success stories among these student startups. Former winner Gu Chi, then an undergraduate from Xiamen University said it is certainly a thrilling experience to get involved in the competition, but he now takes a more conservative and sensible approach. "Students benefit from the competition in different aspects, one thing for sure is that they have a better chance to be recommended to graduate school, " he said with a dry smile, partly mocking himself for taking exactly that path. With a masters degree in chemistry, Gu worked with a language training school and is now developing a new market. "We suffered a loss of 700,000 yuan (US$84,340) in the first half of this year, but since the third quarter, the losses are getting smaller." Gu is optimistic about making a profit the next year. He is the only one in his winning team that is still exploring entrepreneurial opportunities. There are far too many dreams of becoming another Bill Gates, but there are far too few who will keep trying for 18 years, as Gates did. The Chinese people's desire to pursue stability can partially explain this. Entrepreneurial climate Dr Sun Dahai, a professional in innovative entrepreneurship and a judge of the "Challenge Cup" spoke highly of the competition in that it creates an entrepreneurial climate at the universities. "It is unrealistic to expect every entry to turn into a real business, but it will greatly stimulate the innovative and entrepreneurial spirit of the students," he said during an interview after the open presentations. According to reports in the United States, only 10 out of 1,000 business plans receive venture capital and they see a still lower success rate at just 5 to 8 per cent. However, university graduates are faced with the increasing pressure of finding a job. "Building one's own business is a question of choice for students now, but it will become a must in the years to come," as Sun put it. In fact, nine universities have been selected by the Ministry of Education to undertake a pilot project on entrepreneurial education since April this year. Potential job seekers will likely turn into job creators. "Instead of focusing on high-tech projects, students should diversify their products and become more down-to-earth," advised Xiong Fei, vice-president of the Entrepreneur Training College of Beijing University of Aeronautics and Astronautics, one of the pilot project bases. In his concluding remarks at the open presentation, Professor Zhao Chunjun from Tsinghua University, director of the judging panel, said he was impressed by the enthusiasm shown by all contestants. He was equally pleased to see that the business plans in the fourth competition were closer to what business world truly represents. "This is ground-breaking for the competition." According to the organizers, the proposed ideas represent a wide-ranging
spectrum from electronic, mechanical and medical products to the service sector.
The dot-com sector is no longer favoured by entrants, who now focus on energy
sources and environmental, health and rural issues in China, which show more
concern about people's livelihoods.
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