Xinhua Insight: Rural business startups boom amid challenges

A growing number of China's migrant workers are returning to their rural homes to start their own businesses.

In January, Zhang Genfan quit his job as a courier in Guangzhou, capital of Guangdong Province, and went back to his hometown, a small village under the province's Maoming City.

"As a courier, I gained some knowledge about the logistics of fresh food and discovered that fruits grown in my hometown are popular in big cities," he said.

Zhang started a company that sells fruit grown by local farmers through an online store. The company now has over 20 staff, most of them young villagers born in the 1980s, just like himself.

Rural tourism is also a focus for entrepreneurs. Deng Xianji used to work in advertising and printing in Guangdong's Zhuhai City, but now he is back in his home village under Qingyuan City, running a small hotel.

Deng has attracted visitors to the village through photos of local scenery he posted online, and a growing number of hotels and shops have popped up to meet demand.

Starting in the late 1980s, many farmers left their rural homes for employment in China's rapidly growing cities. However, there has been a reverse trend in recent years, as the transfer of labor-intensive industries from urban to rural areas and the urbanization of the countryside lure back migrant workers with business opportunities.

According to the National Bureau of Statistics, the growth rate for the number of migrant workers entering cities has decreased since 2010.

According to research on employment in 500 villages in 10 provinces by the Ministry of Human Resources and Social Security, the number of people starting their own businesses in rural areas during the first half of this year has grown by 3.1 percent from the same period last year. The figure in Guizhou Province was 58 percent.

Currently, China has about 2 million migrant workers who have returned home to start businesses.

OBSTACLES AHEAD

One major problem many rural entrepreneurs encounter is a lack of capital and entrepreneurial experience.

Last year, migrant worker Liu Dong returned to his hometown in Hunan Province to start a chicken farm. He failed to obtain a bank loan because he had no property or land, so he bought 300,000 chickens with private high-interest loans.

"Business was not good earlier this year, and the interest rate is so high. The company was once on the edge of bankruptcy. But we managed to make it through with business improving since July," he said.

Deng Xianji said his village needs better resources and infrastructure as its tourism industry improves.

"We are negotiating with professional tourism development companies for cooperation. However, I have little experience when it comes to problems such as interest distribution, capital structure and policy making."

Wang Wen, who once worked in a farm equipment company in Guangzhou, is now planning to set up an e-commerce company focused on agricultural products.

"As far as I know, some entrepreneurs do not have a clear view of the market and just blindly follow trends when starting their own businesses. They need to be more down-to-earth and invest prudently," he said.

SUPPORT NEEDED

Many have called for more training of rural entrepreneurs.

Deng Xianji suggested that the government should encourage high school graduates in the countryside to enter agricultural vocational schools and provide them entrepreneurial allowances when they graduate.

He also stressed better infrastructure. "Businesses like e-commerce and tourism require improved roads, logistics and support industries in the countryside," said Deng.

Wang Wen hopes that the government can set up special funds for loan guarantees for rural entrepreneurs, and that banks will relax their restrictions in terms of credit ceilings and repayment periods.

Deng Yujun, professor of South China Normal University in Guangzhou, suggested that townships should create industrial development plans based on their own advantages and offer guidance to local investors. Once an industrial cluster is formed, local entrepreneurs can share resources and experience. Enditem

(Liu Dong and Wang Wen are alias