Entrepreneurship in China

China appears to be leading the way in terms of entrepreneurship. Although the Chinese economy has taken some big hits, according to the U.S. Census Bureau Foreign Trade Statistics it's exports went down about 20% after America and Europe started struggling economically, it continues to experience economic growth. However, the United States remains a considerably easier place to start a business in and pursue entrepreneurship. So, how is China leading the entrepreneurial way?

China's rate of self-employment is over 50%, United States is less than 10%. China also has a much higher percentage of people in the process of starting businesses as opposed to the United States. With all of these rates so much higher, it's not surprising that China's percentage rate, according to the 2009 GEM report, for citizens engaging in high-expectation entrepreneurship (growth-oriented) is 4%, the United States' rate is a little over 1%. The reasons for these high rates don't seem to have anything to do with the Chinese government or economy, especially when compared with the United States. The World Bank's 2010 Report ranks the United States at Number 8 and China at Number 151 for the easiest place to start a business and the United States has a more favorable tax system for business owners than does China.

One theory given to explain China's entrepreneurship as opposed to the United States is the drive to be financially successful. Chinese entrepreneurs are more driven to succeed for financial reason as opposed to American entrepreneurs that start their own businesses for independence. In fact, according to the 2007 GEM Report, 60% or more of Chinese entrepreneurs start businesses for income and less than 40% do so for independence. This is in contrast to American entrepreneurs, where 60% or more start businesses for independence and less than 40% do so to increase their income.

Perhaps the desire for money is stronger than the desire for independence. Chinese entrepreneurs are willing to establish business even in the most unstable of conditions; however, American entrepreneurs are less likely to engage in business when they are in unstable conditions. Whatever the reason for the growth of entrepreneurship in China, it is clear that there is much to be learned from these fearless entrepreneurs.