By Alexis See Tho and Sarah Talaat; Edited by Richard Dunham

Jenny Guo decided it was far more important to be a pioneer in virtual reality storytelling in Beijing than to complete a prestigious graduate program at Columbia University. Jackie You walked away from her comfortable life as chief financial officer of a Nasdaq-listed company to start her own venture in China and “play by her own rules.” And Elena Timofeeva had no formal business education when she decided to trade her life as a stay-at-home mom for an adventure opening a cooking school for other expats and foreign tourists in Beijing.

These three women are snapshots of what’s happening in China. Across the country – but particularly in the booming coastal areas – young female entrepreneurs are changing the face of business in the world’s second-largest economy. The vast majority of these young businesswomen are Chinese, although they are joined by a growing number of foreigners who see China’s steady economic growth as a better opportunity to fulfill their own dreams than their homelands.

Some of these entrepreneurs want to create a new Silicon Valley – or invent what comes next. Some hope to find a profitable niche in a massive economy. Some want to play a role in shifting the China from an export-driven manufacturing colossus to an innovation-driven engine of growth. Some want to be their own boss. And some, like Elena Timofeeva, are following their passions. The embroidery on the Russian native’s favorite blouse sums up the philosophy of this new wave of entrepreneurs.

“Life is too short to wait,” it declares. “Let’s do it.”

The riches earned by China’s entrepreneurs may not match the overnight fortunes made during California’s 1849 Gold Rush or the 1920s stock market speculation, but the members of the Millennial generation who are pursuing their own new ventures have a unique opportunity in China’s history. Born after the Culture Revolution, which eradicated the remnants of the Chinese commercial class, and educated after China’s economic opening to the world in the late 1990s, which sent the nation’s Gross Domestic Product and family disposable incomes skyrocketing, young people in China have numerous economic options that were not available to their parents’ and grandparents’ generations.

One fundamental economic statistic explains why women, in particular, have benefited from the rise of entrepreneurship. Women in China have a far higher labor force participation rate—nearly 70 percent—than the world average of about 52 percent, according to the most recent World Bank research. Women contribute about half of household income in China, up from 20 percent in the 1950s, says Shaun Rein, founder of the Shanghai-based China Market Research Group. Despite historical cultural expectations that women should be caretakers and defer to men when making decisions, many young women in China believe they can choose their own course.

Women in China have a far higher labor force participation rate—nearly 70 percent—than the world average of about 52 percent -according to the most recent World Bank research.

“Being an entrepreneur means your business is your life,” said Gao Jingxiang, a 33-year-old doctor and fertility specialist who in 2015 created Happy Pregnancy Mom (乐孕妈咪工作室), a company offering online obstetrics lectures and services.

Nearly 4,000 women, on average, register their enterprises each day in China. Women entrepreneurs now account for one-fourth of all entrepreneurs in the country, according to the September 2015 Gender Equality and Women’s Development in China report released by The State Council Information Office. And locals and foreigners alike are finding China’s economy and demographics ripe for new ventures.

 

 

 

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“This experience gave me the impression that I can do anything I want as long as I put my mind to it, and that I can live and adapt to any culture in the world,” said Rachel Daydou, the French co-founder and chief business officer of Lihaoma (礼好吗), a mobile gifting app based in Shanghai. “I owe China a lot.”

Although many countries in the western hemisphere tout their entrepreneurial economies, the facts show that female entrepreneurship has deeper roots in China than even in the United States and Western Europe. A 2013 Harvard Business Review article reported that women from the U.S. and highly developed European nations “are 18 percent less likely to perceive they have the capability to start a business.” A 2015 report by the Global Entrepreneurship Monitor found that 23 percent of Chinese men and 19 percent of Chinese women say they intend to start a business – higher than the United States’ rate of 18 percent for men and 14 percent for women. Eight of the world’s 10 richest self-made women – whose wealth was not inherited — come from China according a Hurun research report. Two-thirds of all self-made women billionaires are Chinese.

Women, in particular, have tapped into lifestyle or service-oriented businesses, in step with the trend in the Chinese economy where 80 percent of new businesses registered last year were in the service or technology-based industries. That’s a big shift from China’s historically dominant manufacturing and industrial production sectors. In 2015, 55 percent of new internet businesses were founded by women according to the report Gender Equality and Women’s Development in China released by The State Council Information Office.

Because Chinese venture capitalists remain more reluctant to finance female-based businesses – perhaps a throwback to a male-dominated culture – women have flocked to online businesses that are not burdened by highly capitalized start-ups. That’s a mixed blessing for ambitious female entrepreneurs.

“On one hand, doing online business is a good choice because it doesn’t need much capital to start up,” says Gao, the founder of Happy Pregnancy Mom. “But on the other hand, the competition is pretty fierce.”

Statistics show that female entrepreneurs are divided pretty evenly between those who created businesses out of financial necessity and those who were passionate about an idea. More women in rural China and smaller cities are building businesses because it offers them a higher quality of life or more opportunity to climb the economic ladder than old-style jobs in manufacturing or production.

“I really like this job,” says Li Aihong, 36, who runs a guesthouse near a World Heritage Site in Pingyao City in rural Shanxi Province with her husband. “We have a job that allows us to spend more time with our family.”

Women entrepreneurs: Perceived capability vs. perceived fear when starting a business. 2015 Women’s Entrepreneurship Report, GEM.

Because of the challenges faced by women in Chinese business, a number of incubators and support groups have sprung up in major cities to help female entrepreneurs succeed. One professional group, Beijing Women’s Network, organizes monthly events for foreign and Chinese women professionals at all stages of their careers. The group hosts mentorship talks and panels with CEOs and founders of startups to encourage Beijing women to lean on one another when their professional lives or businesses are struggling.

Rachel Daydou, founder of the start-up Lihaoma, took involvement one step further by organizing the Shanghai Startup Grind. There are about 3,000 members of the local Startup Grind chapter, which holds monthly events to connect entrepreneurs and to offer advice and inspiration. Most members are foreigners, so new foreign arrivals to China’s entrepreneur ecosystem can share experiences dealing with unfamiliar business practices and bureaucratic procedures.

 

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“There are increasingly more incubators, accelerators and networking grounds offered by both the government and companies, and local entrepreneurs don’t hesitate to share their experiences with foreigners,” the Paris native said.

This concentration of women in technology start-ups fits neatly into the Chinese government’s economic agenda. The country’s leaders have committed to shifting economic development toward innovation and chuangye, the Chinese term for entrepreneurship. Literally, it translates as “pioneering.”

“I want to be a pioneer,” said Jenny Guo, the co-founder and CEO of LumièreVR,, a virtual reality storytelling company named after pioneer filmmakers Auguste and Louis Lumière. “I want to do it because it’s never been done.”

In China, it is legal for a corporation to hire a man over a woman because the employer does not expect the woman to be committed to the company long-term.

China’s uninhibited push for “mass entrepreneurship” is a critical part of the central government’s economic vision for the next decade. With a record number of Chinese students graduating from universities every year, there are not enough traditional jobs to satisfy the ever-more-educated workforce. The government is unwilling to bear the social burden of rising unemployment, but women often report discrimination in job hiring – being asked if they are married or when they plan to have children, questions that would be illegal to ask in the United States. In China, it is legal for a corporation to hire a man over a woman because the employer does not expect the woman to be committed to the company long-term. In such an atmosphere, entrepreneurship, particularly for women, is the road to future success.

New internet businesses in China by gender (Chinese government estimate).

“Women are increasingly seeing entrepreneurship as a compelling alternative if a career path appears stunted,” the Harvard Business Review article concluded. ”Entrepreneurial activity creates growth and prosperity — and solutions for social problems. And today’s trends show that women will be a driving force of entrepreneurial growth in the future.”

There also are plenty of bright young graduates of both sexes for new entrepreneurs to hire. There will be 8 million young Chinese entering the job market this summer, and, as of June 1, only 27 percent have signed employment contracts, according to Zhaopin Limited’s 2017 survey of college graduates. Just one in 30 Chinese entrepreneurs expresses doubts about the depth of the available talent pool, which, with concerted effort, can buoy the swelling number of recent college graduates in China.

The mindset of college graduates is starting to change, too. The Zhaopin Limited survey found that they are not as focused on high salaries, but on rewarding jobs with development potential. This year, for the first time since the survey began in 2014, “opportunities to learn and grow” passed “good salary and welfare” as the most important factor in choosing a job.

In recent years, economic growth has tilted toward newer companies rather than state-owned enterprises and traditional manufacturing production. Government incentives have helped “innovation” industries such as information and communications technology. The government encourages banks to provide small to medium-sized enterprises with low interest loans. Universities such as Tsinghua and government departments have funded non-profit incubators and established technology parks. In China’s business capital, the Shanghai Technology Entrepreneurship Foundation for Graduates has authorized banks to provide up to 500,000 yuan of interest-free loan to university graduates.

“being female, older, or a member of the Chinese Communist Party all significantly reduce the probability of becoming an entrepreneur.”

“Hundreds of thousands of new Chinese companies have made this country the world’s most competitive business environment,” Edward Tse, Greater China chairman of consultancy Booz & Company, wrote in his book, The China Strategy: Harnessing the Power of the World’s Fastest-Growing Economy. “China is now the world’s largest and fastest-growing source of entrepreneurial startups.”

China’s laborers by enterprise type, World Bank, 2016. (*Micro-enterprise is defined as a small-capital business employing fewer than 10 people).

While the government has introduced policies that promote and support women entrepreneurs, such as more than 220 billion CNY in small-sum guaranteed loans with financial discounts since 2009, female businesspeople face serious obstacles – some common to all entrepreneurs and some unique to their gender.

The government bureaucracy remains complicated and, at times, opaque to young people who have little or no experience setting up and running businesses. The 2013 World Bank “Doing Business” report found that it takes an average of 33 days and 13 procedures to start a new business in China, compared to 12 days and five procedures in the developed countries in the OECD. Hidden costs and administrative inefficiency in government bureaus are common complaints of both new and seasoned entrepreneurs. In a book on entrepreneurship in the developing BRICS countries published in 2015, a Chinese game developer remarked that it took three months for his local government to review his company registration. Hidden costs include extra administrative fees and expensive and unnecessary training to complete tax registration.

“We all have roadblocks facing us,” says Shuang Liu, a graduate of Beijing University of Science & Technology who founded a board game company called “One Moment Games” in 2009. “We need to adjust to succeed in our society and fix the problems.”

In addition to regulations and bureaucracy, young entrepreneurs face government-imposed limits on property rights, limited access to capital, a weak credit system and lack of managerial training, according to a 2015 study by Sofia Berg and Madeleine Englund of the University of Gothenburg in Sweden. Chinese entrepreneurs face difficulty finding and retaining skilled employees, and they face intense competition to hire highly qualified workers, the Gothenburg study found. Older members of society, many still influenced by Maoist dogma, perceive entrepreneurship negatively, and some families do not offer young entrepreneurs their support.

According to the Gothenburg research, women entrepreneurs in China have more difficulty than men in being taken seriously and finding resources to expand, as well as having readily available business networks and support systems – the guanxi that is so important in Chinese society.

“Time and time again, I hear [venture capitalists] openly talk, saying, ‘We’re very selective in women-founded businesses,’” said Jackie You, 42, who worked in the finance industry for almost two decades before creating i.e. Capital, a consulting company focused on providing insight to early stage startups, “Also, they’d naturally ask women, ‘Do you have children? Are you married? Do you plan to get married?’ They don’t really ask men this.”

The new breed of business owner is not deterred by such petty prejudices. Zhu Feng tends to sleep in her office as she plots the rapid trajectory of her company, Xingzhan TV, which provides digital video content for sites as famous as Youku, Sohu and Iqiyi. Its slogan: “Make it happen.”

These days, Zhu tends to sleep in her office, and will take action immediately if she has a new idea, no matter the hour.

“I have always felt that sleep was a waste of time,” she noted. “Why not get up and start working?”

Gao Jingxiang, the online obstetrician, admits that she doesn’t spend as much time as she’d like with her husband and 2-year-old daughter, who is being raised with the help of her parents three hours away in Hebei Province. Each day when she gets off work at 5 p.m., Gao calls her father to listen to her daughter’s voice.

“I talk to her all the way from my office to the bus stop,” she said. “When I get off bus, I will call them again until I get home. At about half past 7, we make online video calls. In spite of all these efforts, I still miss her so much.”

The complications multiply when the start-up is run by a foreigner unfamiliar with Chinese business customs or unable to speak fluent Mandarin. For example, a foreigner seeking to apply for a simple food and beverage business registration without a Chinese business partner must turn in a series of documents from the Chinese name registration to registration with the tax bureau and registration with the statistics bureau.

“Men, in particular, are often surprised by a foreign woman who is running a China-based business on her own.”

Foreign women also feel vulnerable to heightened scrutiny when hiring workers and dealing with customers. “Customers often confuse my [male] manager for being the owner,” said Thai restaurant owner Ally Chonlakarn, who chose to pursue business opportunities in China after receiving her MBA in the U.S. “Men, in particular, are often surprised by a foreign woman who is running a China-based business on her own.”

Because Thailand, the United States and China have different work ethos, Chonlakarn said she faced difficulties finding people who fit her demanding – and unusual, for China — job requirements, like requiring chefs to help with cleaning. She went through two teams before she found the right people to handle the daily operations while she focused on the business side of the restaurant.

Some foreign women entrepreneurs see the challenge as a test for their perseverance and personal strength. Elena Timofeeva, founder of Ci Li Xiang Cooking School, said she started and runs the business exactly as she sees fit, from hiring chefs to designing courses. She is resilient and knows what she wants – even if she can’t always say it in Mandarin.

“There is a saying among artists – if you want to give up, take a pause, take a deep breath, remember why did you start, and keep going,” said Timofeeva, smiling. “Of course there are ups and downs, but I always remember where I started and where do I want to be. It keeps me moving forward.”

China’s economy has been moving forward since the 1980s, when Deng Xiaoping began to open up nation to the world after four decades of economic isolation and started to restructure chronically inefficient state enterprises. It was apparent to China’s central government leaders that, in a more market-driven economy, entrepreneurship must be in the forefront. But the path was slow and pot-holed after decades where owning private businesses was not permitted and families of former property owners were persecuted. The country’s first patent law was introduced in 1984. Later, the government repealed a law that limited private firms to seven employees.

With the expansion of China’s highly regulated private sector, there are numerous opportunities for young people that were not available to their parents’ generations. Chinese officials are not only trying to convince young college graduates to create ventures, they are seeking to woo ethnic Chinese and Chinese people who studied abroad – known colloquially as “sea turtles” because, like the marine creatures, they eventually return home. A study by Ilan Alon, Everlyne Misati, Tonia Warnecke and Wenwian Zhang published in the International Journal of Business and Globalisation found that Chinese female entrepreneurs who return from other nations start their businesses — or reach executive positions — at a younger age than Chinese women who never leave the country.

“It is widely recognized that emerging market opportunities have produced flocks of successful Chinese entrepreneurs returning from overseas, especially from Western industrial economies,” stated the book Transnational & Immigrant Entrepreneurship in a Globalized World.

Jenny Guo left China to pursue a master’s degree at Columbia University but came back to start her virtual reality company. Guo’s company, formed in 2015, was named as one of the top 10 virtual reality businesses in China last year. The 26-year-old entrepreneur commutes between Beijing and the U.S. to fulfill her company’s vision, which produces content that immerses viewers in a three-dimensional 360-degree environment by using special headsets. While there is stiff competition, she’s gotten good reviews so far.

“Jenny has always been the innovator among us,” said Yuxin Huang, a film director who met Guo in college and has worked with her on various film projects. “She is never afraid to explore new technical and artistic territories. Willing to dive deeply into VR at a stage where it was still quite unknown to most of us, Jenny has built her company from scratch and has done a great job developing it into what it is today.”

“I don’t think everyone should run a start-up,” Guo said. “That is a false ideology society gives us, especially in China.”

But Guo warns that the lifestyle she chose is not for everyone. She says all entrepreneurs – and particularly women – should think about the costs and sacrifices they will have to make before entering the business world.

“I don’t think everyone should run a start-up,” Guo said. “That is a false ideology society gives us, especially in China.”

With the rapid rise in women entrepreneurship in China, institutional support systems have not kept pace. According to the 2015 Female Entrepreneurship Index, calculated by the Global Entrepreneurship and Development Institute in Washington D.C., China placed in the middle of the all nations globally for assisting female high-growth entrepreneurs. Topping the list of countries whose institutions support female start-ups: the United States, Australia, the United Kingdom, Denmark and the Netherlands.

The 2017 Mastercard Index of Women Entrepreneurs ranked China 12^th in the world for female entrepreneurs possessing the “knowledge assets” and “financial assets” needed to start-up an enterprise. But the nation ranked 40^th of 54 countries analyzed in “supporting entrepreneurial conditions” for women. Indeed, the Mastercard Index listed China as one of a handful of developing countries — with Bangladesh, Uganda, Mexico, Peru, and Vietnam – where women are eager to engage in entrepreneurship “even though the underlying entrepreneurial conditions are not highly favorable.”

Nevertheless, China’s women entrepreneurs persist. Twenty-five-year-old social worker Gulzat Ahmad, an ethnic Uyghur from western China’s Xinjiang region, pulled in 400,000 RMB in venture capital for her company Asmat after her concept for lightweight, fast-wicking hijabs for female Muslim athletes won last year’s Shanghai Startup Cup for top woman-led business. The hijabs, which have been deemed in compliance with Chinese school safety standards for sports uniforms, are set to go on sale on the Asmat website in November.

“Our competitors are not targeting Asian markets, and that gives us a time to capture the market,” said Xu Yifei, Ahmad’s business partner.

Ahmad has a global vision for her enterprise, already identifying potential expansion to Pakistan, India, Malaysia, Indonesia and other Asian countries. But many women entrepreneurs are satisfied with a market niche close to home. Zou Tong is the 28-year-old CEO of Black Coffee Diary, a floral business in Shijiazhuang, one of the biggest cities in Hebei Province. She says women entrepreneurs must adapt to Chinese social and cultural traditions as they launch their ventures.

“The key point is to understand the Chinese situation, the thinking style and leadership style,” she said. “Knowledge about women, and their power, will progress soon.”

Chi Qing sees success on the horizon. Born in Hong Kong and raised in the Netherlands, she decided that Beijing was the place for her to create a professional photographer’s studio. She’s encountered many difficulties in building a profitable business over the past decade, but she is optimistic about her future – and those of fellow female business owners. Her advice?

“Have an open mind,” she said. “Experiment. Never give up. Get inspiration from others, but keep true to your own vision.”

Recent actions by China’s government have eased some of the regulatory burden. Measures put in place in October 2016 streamlined the number of documents necessary for application, including one certificate that now took the place of five separate ones previously. The State Administration Industry and Commerce also announced April 11 that it would implement a nationwide digitized corporate registration platform and a new electronic business license, the system for registering companied will go digital in October.

Before the changes were made, the registration process for a new business potentially took months, but Thai entrepreneur Chonlakarn recently registered her restaurant, Sa Thi, in a matter of weeks.

Whatever the obstacles, this new breed of entrepreneurs is determined to make a go of it.

“Women in China are very tough,” said board game entrepreneur Shuang Liu. “There is an old saying in China: ‘Women hold up half the sky.’”