The Municipal Labor and Social Security Bureau (LSS) in Shanghai is promoting 300-plus different business projects to the unemployed, especially the young, to help them set up their own ventures.

The municipality will grant subsidy and preferential policies to all the business people after their operations have been set up.

According to the government of the Hongkou District, the initial phases of the program started in late February. The municipality offers the unemployed bank loans worth 50,000 yuan (US$6,000) to start small businesses in the district.

If a business can operate well for one year, it gets a subsidy ranging from 30,000 yuan (US$3,600) to 50,000 yuan from the municipal government.

At the same time, the new businesses will also be subsidized 1,500 yuan (US$187) for each laid-off worker they absorb.

They are able to employ 10 people at most.

In this sense, the projects are known as mini businesses, explained Sheng Zuhuan, director of the LSS' employment guidance center.

Deng Hua, vice-director of the bureau's business start-up guidance center, said: "We want to encourage more unemployed young people in the city to solve their problems by setting up their own small companies first, which will offer them more confidence and improve their lives at the same time."

Deng said all of the projects recommended by the bureau have been evaluated by more than 10 professional business consulting companies. The local government paid up to 2,000 yuan (US$240) in consultation fees for each project.

In this way, the risks of failure for the start-ups, especially when being run by young graduates who have very little experience, will be decreased.

Moreover, the graduates are also offered up to three months of free training, which shows them how to set up and run a business, as long as they apply for it through the LSS.

Sheng said: "Many local universities, such as Fudan University and Jiao Tong University, have asked the bureau to bring the courses onto campus."

Up until now, a total of 316 such projects -- including 270 franchising companies and 46 co-operative groups -- are estimated to have created 5,000 jobs, according to bureau statistics.

Among all the 300-odd projects, 90 per cent of them are in the public service sector.

The LSS will also collect more business information from the city's consultative companies to offer further professional training to a greater number of start-ups in the near future.

By the end of March, more than 100,000 previously unemployed people, including both middle-aged and young citizens, were running their own businesses. Loans to them totaled 8 million yuan (US$960,000 million).

(China Daily April 14, 2004)