Women Entrepreneurship in China: Past, Present, and Future
Women Entrepreneurship in China: Past, Present, and Future
SIMO University of St.Gallen (HSG)
China’s female entrepreneurs face a legacy of liberalizing economic policies and of traditional social conventions as they shape their role in present and future Chinese society.
As with most Asian cultures, the roles of women have been historically underestimated, and China is no exception. If you look at the country before the 20th century, you will probably bump into traditional ladies, who have their feet tightly bound, who are taking care of the kids at home, and who only show up to serve a cup of tea.
Women in China attained equal rights at a very late stage. For thousands of years they had endured gender discrimination plus hardly any economic power. Women were regarded as accessories of their male ‘guardians’, namely their father and husband before and after marriage respectively, and of their son after their husband had died, known as ‘the three obediences’. It wasn’t until the early 1900s that women started to gain equal access to education. After the People’s Republic of China was founded in 1949, Chinese women began to participate in economic life thanks to a number of regulations and laws providing protection in the workplace for women by ensuring equal opportunities.
Although the “son preference” sentiment deeply rooted in people’s minds still needs time to fade away, the figures have shown tremendous change over recent years. Chinese female workers currently make up about 50% of the enrollment at universities and 36% of the total labor force, according to state media. Women now contribute about half of household income, up from 20% in the 1950s. Furthermore, China has now become a real incubator for female billionaires. According to Forbes listing, only 14 women in the world have earned their own 10-figure fortunes in 2010, and half of them are from China.
Why did Chinese women become so successful today when it comes to business? One would easily attribute this to the transitional economy, which provides countless opportunities, today for men and women alike. The private sector has allowed for free development since 1978. With incredible growth during the 1990s after the market-oriented economy was officially established throughout the country, it has become the most active segment. Entrepreneurship was fostered under this condition, and was also encouraged by the government, which issued quite a few urge policies including the Small and Medium-Sized Enterprises Promotion Law. The more recent industrial restructuring shifted the economy’s focus to the service industry from the traditionally emphasized primary and secondary industries. This measure has brought wider options for women, by opening up business areas where “female” advantages could be exercised.
The struggle to survive is the innermost motivation of women entrepreneurs in China. Before the one-child policy was initiated, girls historically received less attention than their brothers within their families. They were forced to be independent earlier in order to better educate their male counterparts. Moreover, during the past few decades, many state-owned enterprises were either restructured or encouraged to become financially independent. Large numbers of women working along the production lines in textile factories and other industrial firms were laid off, and had problems maintaining even basic living standards. This triggered the ‘push’ factors of entrepreneurship - the motivation under which the situation presented should be changed because of some disadvantages. On the other hand, pull factors are related to the motivation that originates from actively pursuing good prospects. According to the Global Entrepreneurship Monitor (GEM) data, entrepreneurship in China is currently more ‘poverty push’ than ‘opportunity pull’.
Among those successful businesses of women, some can again be attributed to their origin in state-owned enterprises. A survey of Chinese female entrepreneurs found that many of them built up business acumen and managerial skills by holding high ranking posts at large state-owned enterprises, and that it is through these sorts of connections that entrepreneurs are able to raise the capital they need. Others started from scratch and succeed through hard work and a good sense of potential opportunities. Sometimes these opportunities are relatively small or happen by coincidence but by being willing to gradually invest, these opportunities then turn out to be a great success.
Another aspect that differentiates Chinese women of working age from those in other parts of the world is that they usually have much less pressure to bring up children, not only because of the one-child policy, but also because of hands-on grandparents. Women in China are entitled to only three months’ paid maternity leave and mostly return to work afterwards, which inevitably leaves the grandparents to take over the duties. Due to the “big family” concept, the older generation has traditionally played a large part in bringing up children in China. A baby is often farmed out to the grandparents for the first few years of its life, or the grandparents come to live in the family home to look after it. If no grandparents are available, nannies are plentiful and affordable, as is described by an Economist special report.
With regards to the future of women entrepreneurship in China, one simple question comes up: Can they continue to achieve more and grow? Sadly the outlook is not that optimistic: The vast majority of current women entrepreneurs started their careers in the 1990s, and virtually all of them are now in their 40-50s. There is a lack of younger stars emerging, and the second generation that is supposed to take over their family businesses starts doubting. With the elimination of “poverty push”, pull factors need to be in play, but they won’t work out if young people don’t reflect and behave in an entrepreneurial way. One of the most important reasons originating this development lies in the education system, which emphasizes grades more than anything else. The cramming method of teaching restrains students’ creativity and even their freedom to pursue their own interests, traits that are crucial to entrepreneurship.
Fortunately, gender differences have almost no influence in career choices for today’s young generation. No male-dominated industries can be really picked out, and in almost every profession there are well-performing females. The key issue is to foster entrepreneurial spirit through education and provoke the “pulling” opportunities. As said in an interview by Zhang Xin, CEO of SOHO China, who is listed in the ’10 most powerful women entrepreneurs’ by Fortune, "In China, no matter what industry you're in, you can try something new and put all your thoughts into doing so, because nothing was previously there. It still feels like anything is possible."