【COVID-19】Nearly 6% of Chinese households start up their own businesses and digital economy helps ‘grassroots’ entrepreneurs more: survey By Xin Yuan - 2020-05-18
Jiemian News
The Chinese Family Financial Survey and Research Center of the Southwestern University of Finance and Economics and Ali Research Institute jointly released a report on Thursday stating that the average household entrepreneurship ratio in the country is about 5.9%, and the digital economy has played a huge role in reducing the urban-rural income gap and preventing poverty.
According to the report titled “Digital Economy Helps the Establishment and Growth of Small and Micro Enterprises” released by the above two institutions, e-commerce development in all regions across the country is relatively balanced, and the proportion of entrepreneurial families in the most developed regions in China is only 1.3 percentage points higher than that in the most backward regions.
According to the survey data by the Southwestern University of Finance and Economics on China’s small and micro enterprises and the e-commerce data from Ali Research Institute, the proportion of entrepreneurial households in the areas with the lowest e-commerce development level was 5.5%; the proportion of entrepreneurial households in the areas with the highest e-commerce development level was 6.8%.
Gan Li, one of the authors of the report and director of the Chinese Family Financial Survey and Research Center, said that e-commerce is one of the important formats in digital economy. E-commerce platforms provide more online and offline entrepreneurship opportunities, effectively improving the survival rate and growth potential of small and micro enterprises. They also play an important role in accelerating the economic development of the west region and narrowing the economic gap between the east and the west regions.
The report quoted survey data as saying that when the e-commerce index went from low to high, the proportion of entrepreneurs in third-tier cities and below rose from 5.4% to 9.5%. The digital economy has made significant contributions to reducing regional differences and promoting economic growth.
The report also pointed out that the digital economy is more helpful in “grassroots” household entrepreneurship, because the development of the digital economy allows potential entrepreneurs to obtain information at a lower cost.
The survey showed that when the level of e-commerce development went from low to high, the proportion of family entrepreneurship in the lower part of the social network increased from 6.3% to 7.7%, and the proportion of family entrepreneurship among those who lacked human capital rose from 5.1% to 8.2%. The rapid development of e-commerce platforms has effectively lowered the threshold for entrepreneurship, and the proportion of family entrepreneurship among those with low material capital has increased from 4.3% to 7.3%.
In addition, the report showed that the more developed the e-commerce sector, the higher the survival rate of enterprises. In cities with low e-commerce indexes, the survival rate of enterprises is only 63.2%. As the e-commerce index rises, the survival rate increases to 70.2%. With the improvement of the e-commerce index, the growth rate of surviving companies is also faster, and the average annual growth rate of operating income has increased from 5.29% to 5.82%.
It is worth noting that the development of the digital economy is of great significance for extending the life of small and micro enterprises. The survey showed that with the increase of the e-commerce index, the survival rate of startup companies has increased from 49.89% to 59.70%, and the survival rate of companies in the growth period has increased from 64.36% to 75.2%.
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