Chinese Premier Li Keqiang has proposed a financial support system that will help young college graduates to start their own businesses, by means of providing policy directives that promote entrepreneurship.

He also wants to develop programs that will see innovation as the new tool for economic development. The plan comes, as 7.4 million Chinese students are set to graduate this year, making this period a tough job hunting season.

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Two percent or 150,000 of the 7.4 million graduating students are willing to brave the odds and start their own small enterprises. This is based on the survey conducted by the China Democratic League.

The students do not lack ideas on what businesses to set up. What keeps them from taking action is the inaccessibility of loans.

China Democratic League vice chairman Xu Hui says, "Banks don't like start ups, particularly from college grads. Most are inexperienced and don't fully understand the tasks. Besides, there is a rigorous application process, and lots of red tape to go through for a loan."

Xu says the students end up seeking assistance from family and friends. He believes the government should do more to support the enterprising graduates.

Xu urges government and insurance firms to create a credit evaluation system that will provide funding.

Another Vice Chairman for Democratic League, Zheng Huiqiang, says, "I think government should encourage insurance companies to develop target services to student start-ups. We can also set up a system to screen the business projects and finance the good ones."

He further says, "We can also evaluate the personal credits of students to minimize the risks of bad loans and frauds."

Zheng has developed a proposal based on his experiences as a working student at Tongji University in Shanghai.

The members of the Chinese People's Consultative Conference agree that encouraging entrepreneurship does not just improve people's lives. They say it is also very important for China's overall economic improvement.

TagsStartups, college graduate, entrepreneurship, business loan, Li Keqiang, CPPCC