People's Republic of China
China’s well-documented transition from centralized economic development through state-owned enterprises (SOEs) to decentralized growth through socialist market economics is exemplified through the rise of non-SOEs, many of which take the form of small and medium enterprises (SMEs). More...
China’s well-documented transition from centralized economic development through state-owned enterprises (SOEs) to decentralized growth through socialist market economics is exemplified through the rise of non-SOEs, many of which take the form of small and medium enterprises (SMEs). China defines SMEs based on a variety of characteristics, including by sector, number of employees, sales, and total assets. Thus, SMEs in China may employ as few as 200 and as many as 3,000 people. By that broad definition, China’s Ministry of Commerce found that SMEs contributed 60 percent of China’s GDP in 2012, and further provided 80 percent of urban job opportunities, introduced 75 percent of new products, and accounted for 65 percent of patents and inventions.
The role of women in the Chinese economy is significant, with a female labor force participation rate of 63.9 percent in 2013 (versus 78.3 percent for men). Women are found in nearly all sectors of the economy, both dominating certain manufacturing jobs and rapidly increasing their presence in skilled professions. According to the 2014 National Development Report of Small and Micro Enterprises, 21 percent of Chinese women are self-employed and women account for 25 percent of all entrepreneurs in China. Today, almost 30 million businesses in China, mostly microenterprises and SMEs, are owned by women; 66.3 percent of female entrepreneurs possess more than half of the shares in their enterprises, while 46.5 percent own more than 75 percent of the shares. Female entrepreneurs are also better educated than before: the proportion of those who attained masters’ or Ph.D.’s increased by 19 percent from 2009 to 2014.
In 2014, the China Association of Women Entrepreneurs released the 2014 Female Chinese Entrepreneurs Development Report in Beijing at its International Forum of Outstanding Women Entrepreneurs. The report found that Chinese women continue to be highly enthusiastic about entrepreneurship, and goes on to provide some characteristics of female entrepreneurs and key challenges to their business development. According to the report, most businesses founded by Chinese women are middle- and micro-sized, distributed among the agriculture, manufacturing and infrastructure, and service industries. Challenges identified by women entrepreneurs included technical and capital constraints to fulfill environmental protocols, and difficulty accessing capital at affordable costs.
According to research conducted in 2012, the operating environment for SMEs is made more difficult by the fact that regulatory agencies responsible for taxes, intellectual property, and labor (among others) are not always set up to support entrepreneurship. This can affect the level of trust between entrepreneurs and the role of government in private enterprise. In China, the vast majority of female entrepreneurship programs are supported by the government, NGOs, or both. Often the government plays the role of financier while NGOs operate the programs, promote information and communications technologies, subsidize loans, provide credit, and offer skills training, among other things.
With respect to women in management, executive-level positions, and other leadership roles, there is evidence of both progress and persistent limitations. A 2014 Grant Thornton business survey reported that women hold 38 percent of senior management jobs in China, one of the highest rates in the world. On the other hand, the China Europe International Business School reports that the proportion of female directors has increased only slightly, from 9.2 percent in 1999 to 11.7 percent in 2010. A 2015 report by the New York Times found that women constitute around 9.6 percent of board members in the CSI 300 (an index of 300 stocks traded in the Shanghai and Shenzhen stock exchanges).Of the 300 companies listed, 31 have no female senior executives; 30 of those companies are majority state-owned. Leadership in public institutions also present a mixed array of conditions. Today, around 24 percent of the 85 million members of China’s Communist Party are women. On the other hand, in 2011, just 13 of the 204 members elected at the most recent meeting of the Chinese Communist Party's central committee (its top decision-making body) were women.
Entrepreneurship networks for women in China are just finding their footing, with a great deal of potential remaining to be fulfilled. Liu Ting, president of the Chinese Women’s Chamber of Commerce, advises women to build their networks to address their lack of business contacts, skill imbalances, and the general gender inequalities existing in Chinese business structures.
The China Women’s Chamber of Commerce is housed inside the All-China Federation of Industry and Commerce and provides direct access to important industry contacts, both male and female. The Chinese Association of Women in Industry, affiliated with the member economy government, is one of the oldest women’s networks and has its own consulting and research arm to promote women’s rights and legal advancement.
There is also WEConnect, which helps women access global value chains and promotes networking within China and between Macau, Chinese Taipei, and Hong Kong, China. 85Broads and Lean In, two organizations headquartered in Beijing, have small but growing membership bases.
Networks that support women’s access to capital and assets:
Networks that support women’s access to markets:
Networks that support strengthened capacity and skills for women in business:
Networks that support women’s leadership, voice and agency:
Networks that support women and innovation and technology:
In 2013 there were reported to be just over 100 nonprofit microfinance institutions (MFIs), primarily established by the Rural Development Institute of the Chinese Academy of Social Sciences, the China International Center for Economic and Technical Exchanges, the China Foundation for Poverty Alleviation, and the All-China Women’s Federation (ACWF).
Data disclosed by the China Banking Regulatory Commission indicate that at the end of 2012, the balance of economy-wide loans to micro and small enterprises had amounted to CNY 14.77 trillion (about US$ 2.36 trillion), an increase of almost 20 percent since the beginning of 2012.
Two multinational corporations, Walmart and Goldman Sachs, are dedicated to a long-term engagement with China’s women entrepreneurs. Walmart, in collaboration with Business for Social Responsibility (BSR), seeks to empower women in factories, while Goldman Sachs supports established entrepreneurs through lending and business support. The most exciting home-grown initiative comes from China’s own Alibaba. In January 2015, Ant Financial, the finance arm of the e-commerce company, promised to create a financing program to lend US$80 million of International Finance Corporation (IFC) funds to women entrepreneurs. This represents a great opportunity for China’s e-entrepreneurs who make money selling goods and services on business-to-customer portals like Alibaba. In 2012, women entrepreneurs accounted for approximately 46 percent of all business owners on Alibaba’s web portals.
In addition to corporate engagements, many regional organizations provide training or loans for entrepreneurship. Many of these services are for college graduates, persons with disabilities, and other disadvantaged minority groups. The majority of these programs do not exclude women, but it is difficult to show or prove that women are the primary beneficiaries of these initiatives.
Initiatives that support women’s access to capital and assets:
Initiatives that support women’s access to markets:
Initiatives that support strengthened capacity and skills for women in business:
Initiatives that support women’s leadership, voice and agency:
Initiatives that support women and innovation and technology:
Within China’s systems of government, a number of policies and programs are directed at women entrepreneurs and entrepreneurs more generally. Services demonstrate a variety of approaches, including professional training, small-loan guarantees, preferential taxes, and business incubators. Two incubators in particular directly assist female entrepreneurs, one in Tianjin founded in 2000 and one in Qingdao established in 2012.
Services vary across provinces, with the more developed regions offering a greater range of services. Some provinces offer an entrepreneurial training certification which, upon presentation, allows women to access collateral-free bank loans. In some loan departments of banks and credit guarantee organizations, women entrepreneurs are given priority over men, and can access a simpler application process. In some cases, enterprises that employ laid-off women will receive special opportunities. Finally, a number of projects offer funding, knowledge and skill training and other support services for women.
Key providers of services directed toward women are the All-China Women’s Federation, the National Working Committee on Women and Children (a group comprising leading officials from all 24 governmental ministries and five NGOs and civil society groups) and the Women Entrepreneurship Guiding Centre (established in 22 provinces, five autonomous regions, and four cities).
According to an announcement from the All-China Women’s Federation at the 2014 APEC Women and the Economy Forum, the Chinese government has subsidized micro-loans totaling approximately US$30 billion for nearly 10 million Chinese women to become self-employers and business owners between 2009 and 2014. The interest subsidies provided by the government for these loans totaled CNY 11.3 billion (about US$1.8 billion). Most of these subsidized microloan programs are run by local governments and are meant exclusively for registered permanent residents. For their part, migrant women are rarely the beneficiaries of the assistance because they are not permanent residents of the cities where they intend to start businesses.
More broadly, the Asian Development Bank (ADB) has found that Chinese banks have increased lending to the SME sector, with SME loans outstanding reaching US$25.15 trillion in 2012, a 15.5 percent increase from the previous year. Thanks to the government’s financial reform in 2008, nonbank financial institutions (NBFIs) such as microcredit companies are also serving SMEs, farmers and individuals.