2023 POLICY ROADMAP

The Chinese economy was on track to meet its 2023 growth target, reflecting strong post-COVID recovery. Inflation was both low and stable, within the range of around 2%, and with little impact on entrepreneurship.

The Chinese government continues to implement a comprehensive support package post-COVID, with positive impacts on entrepreneurs.

2023 Framework Conditions Review1

China’s entrepreneurial environment was ranked fourth of 51 economies in 2019, but was adversely affected by the pandemic and is still recovering, now placing it 10th of 49 in 2023.

In 2023, eight of the 13 Entrepreneurial Framework Conditions (EFCs) in China scored as sufficient or better, with Physical Infrastructure rated highest and Ease of Entry: Burdens and Regulations rated lowest, and hence a major concern. Both education EFC scores improved since 2022, but all other 11 condition scores were lower, with the largest fall being for Entrepreneurial Finance. Three of China’s EFCs were ranked within the top five for that condition among the 49 economies in GEM 2023: Government Policy: Taxes and Bureaucracy (3rd in GEM), Government Policy: Support and Relevance (4th) and Ease of Entry: Market Dynamics (5th).

New questions asked national experts to assess the quality of social support for women entrepreneurs, and those women entrepreneurs’ access to resources relative to that of men. China scored 4.4 for social support, less than sufficient and placing it 16th, and an excellent 6.8 for comparative access to resources, second highest in GEM.

2023 Entrepreneurial Activity Review

In the GEM Adult Population Survey (APS), around one in two adults in China reported that their household income had fallen in 2023, a high proportion but lower than the almost three in four one year before.

Entrepreneurship has a reasonable profile in China, but there is some lack of confidence. Just under
three in five adults knew someone who had started a business recently, with a similar proportion considering themselves to have the skills and experience to start their own, the lowest proportion in Level C. Nearly seven in 10 adults saw good opportunities to start a business locally, but about two out of three of these would not start a business for fear it might fail, which

is highest among the 45 economies in the 2023 GEM APS. Just under one in 20 adults not already doing so expected to start their own business within the next three years: the lowest intention rate in GEM.

The percentage of adults who were already starting or running a new business in China rose to nearly
7% from 6% the year before, the lowest rate in Level C and sixth lowest in GEM, and a long way short of pre-pandemic levels. Men were slightly less likely than women to be starting a new business, but the gap was small. The Established Business Ownership rate was just one in 25 adults, up a little from a year earlier.

Nearly seven in 10 new entrepreneurs agreed with the motivation to earn a living because jobs are scarce, and one in three expected to use more digital technologies in the next six months. Nearly one in five of those new entrepreneurs expected to employ at least another six people over the next five years. Less than one in four were solo entrepreneurs, defined as those with one owner and no current employees — the third lowest level in GEM.

1 A brief description of the GEM approach is given in the footnote on p. 107.