Xiaohong He, Professor of International Business, has been hard at work studying entrepreneurial efforts in China. According to Dr. He, “The re-emergence at the grass-root level of entrepreneurial development in villages and towns across China has been the driving force for the state’s economic miracle.” She notes, that “as of March 2013, there are over 13 million domestic firms in China, 11 million of which were private business, amounting to 80% of total economic output. Alongside these numbers are over 40 million individual household businesses (getihu) and 700 thousand farmers’ co-operatives.”
Contrary to popular opinion, the majority of small and medium size businesses (SMEs) in China are private-owned and contribute to 50% of Beijing’s tax revenue, 60% of GDP, 68% of exports, 80% of employment, 65% of patents, 75+% of technological innovations, and 80+% of new product development.
Given this impressive contribution, there are both opportunities and yet also challenges. For the past 30 years, the majority of these start-ups, especially at the village and town level, obtained their financing through an underground banking system with extremely high interest rates. As Dr. He notes, “the financing cost is twice that for larger business firms and has inhibited the growth of SMEs in China. However, the large scale of contribution and entrepreneurial energy brought by this private sector has attracted a lot of attention from government policy makers.” According to Dr. He, “given its increased economic importance, this private sector is too big to ignore and there exists enormous economic potential in the underdeveloped, western region of China.” Both QU’s International Business major and its Entrepreneurship and Strategy major offer courses in studying international business trends, and the Office of Global Education at QU works in conjunction to support not only the research interests of instructors but the study excursion interests of students, as well.