SHANGHAI • Quitting her receptionist job, joining bands and chancing her tattooed arm at business ventures would once have branded college graduate Ding Jia as a rebel in China. Now she can claim state endorsement as a "creative".

"I haven't had a formal job in years," said Ms Ding, 31, sitting in her tiny bar in Shanghai.

She has no regrets, but no illusions either. "Entrepreneurship can be a really hard experience," she said. "Profits can be so thin."

While most parents might warn their children off high-risk, low-reward self-employment, Ms Ding says her nurse mother and taxi driver father were supportive.

Recent graduates who start businesses are being hailed in state media as a new creative class that will build China's Silicon Valley.

"Creatives show the vitality of entrepreneurship and innovation among the people, and such creativity will serve as a lasting engine of China's economic growth," Premier Li Keqiang said in January.

Many are getting training, subsidies, free office space and other support from district governments and universities. Optimists hope the next Jack Ma or Mark Zuckerberg, founders of the Alibaba Group and Facebook respectively, will emerge from this pool.

But sceptics say the policy is setting up inexperienced youngsters for failure.

Still, the measures aim to help shift China's economy towards knowledge-driven services and address unemployment among college students. A Beijing University study found that entry-level salaries in Shanghai averaged 3,241 yuan (S$707) a month. Surveys show 20 to 30 per cent of college students now aspire to entrepreneurship or self-employment.

Labour analyst Cui Ernan said official data shows that though undergraduate numbers swelled to record highs last year, the number seeking work in the formal job market appeared to shrink.

Cynics say pushing student entrepreneurship is mostly about meeting targets while heading off political unrest among the disaffected.

A busy entrepreneur, on the other hand, counts as both employed and as a new business registration.

Mr Parker Liu, chief operating officer of a mobile technology start-up in Beijing, said district officials regularly scour entrepreneurship events seeking start-ups to subsidise.

He said: "These government officers, they don't know much about entrepreneurs or start-ups, but they know a lot about political evaluations. They have a quota."

The University Students Venture Park in Shanghai was designed as an incubator for students considering a start-up. But many venture capitalists doubt their effectiveness. "A university is a terrible place to learn how to start a company," said venture capitalist William Bao Bean.

What is needed, critics say, is a dismantling of policy barriers that make life tough for the private sector, like weak legal protection for new ideas, restricted access to capital and labyrinthine regulations.

Failure rates appear unsurprisingly high. "They have very poor management skills," said Mr Cui.

"(For) most of the businesses run by college students... only a few succeeded." But some have turned their dreams into a modicum of success. Mr Jiang Gongbao's marketing company has lasted long enough to hire a few employees.

He said: "Failure is not a bad thing, as the process to start up a business is always meaningful."

REUTERS