Shanghai will offer business start-up funding to university students to try to ease mounting unemployment among new graduates, the Shanghai Education Commission announced yesterday.

The Shanghai Science and Technology Investment Company, the fund operator, has signed contracts to initiate the scheme with four prestigious local universities: Fudan University, Jiaotong University, Shanghai University and the Shanghai University of Science and Technology.

The plan calls for a total of 150 million yuan (US$18.1 million) to be earmarked for graduates to turn their creative research into new businesses. Funding will come from a government fiscal budget allocation, subsidies from individual universities and public funds.

About 50 million yuan will be disbursed in each of the next three years, commission officials said.

The money will be invested mainly in research-based businesses and consulting companies opened by fourth-year university students or new graduates, subsidizing their office rents and operating expenses.

Young entrepreneurs will also be entitled to a basic living subsidy of no more than 2,000 yuan (US$241.65) a month.

Fund managers will invest up to five times the business owners' initial capital, but a 300,000-yuan (US$36,247.2) ceiling will apply to each business, officials said.

"The joint investment fund will provide fertile ground where university students can transfer their creative research achievements into daily application, as well as providing one more choice in their job-hunting," said Vice Mayor Yan Junqi.

The city's new-graduate employment rate was 90 percent last year, with 0.1 percent, or about 100 graduates, opening their own businesses.

But about 70 percent of these new companies went broke within a year for lack of capital, orders and operating experience, according to the Yangpu High-tech Park, the city's biggest business-starting zone for students.

To curb the problems, the commission will team up with the Shanghai Personnel Bureau and Shanghai Labor and Social Security Bureau to offer free training and business assessment to track the development of students' companies.

Also in Shanghai, on March 21 the Microelectronics College of Jiaotong University made the nation's first salary pledge for top postgraduates.

School vice president Fu Yuzhou said that his school will guarantee the top 30 percent of this year's enrollees, who will be the first to graduate from the new full-time program, a first-year salary of more than 70,000 yuan (US$8,500) when they graduate in early 2008. If their actual salary falls short of that, the school will make up the difference.

(Shanghai Daily March 23, 2005)