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Do Online Startups Pose a Risk to the Real Economy?
The blame on young people's disproportionate involvement in online business triggers debates
 NO. 5-6 FEBRUARY 2, 2017


Dong Mingzhu, Chairperson of Zhuhai-based Gree Electric Appliances Inc., recently said in a China Central Television program that most people born in the 1990s are unwilling to work in the real economy; they prefer to open online shops, making only about 2,000 yuan ($300) a month, and don't like to be restricted by the discipline and rules in companies. "This trend poses a hidden risk to the nation's economic development. The mushrooming of online shops not only drastically reduces the number of physical stores, but the trend is also detrimental to the whole society," Dong said.

Dong's remarks soon attracted numerous retorts. Many believe opening online shops instead of getting company jobs represents young people's freedom of choice. Besides, economic growth slowdown means China's manufacturing industries are not creating as many jobs as they did previously, so establishing online businesses is a good way of alleviating the pressure on the economy to provide employment.

Nevertheless, others agree with Dong, believing that it's dangerous when a nation's real economy is increasingly squeezed by the Internet economy.

New business model

Tan Haojun (China Youth Daily): To see online shops operated by young people as a hidden risk that will damage the real economy is a radical idea. The real economy is undoubtedly important, but other forms of the economy also matter.

The young people who operate online shops do not necessarily object to the real economy, and more importantly, you cannot say for certain that they are satisfied with an income of 2,000 yuan or so per month. The threshold for setting up online shops is low, so they are favored by the young as a means of getting started in business. In this way, young entrepreneurs can interact with all kinds of people and accumulate business experience.

With more and more young people choosing to open online shops, employment pressure on the real economy is somewhat declining. Some of them also continue hunting for jobs in traditional companies while operating their online business. Compared with unemployed young people not seeking to support themselves and either idling away their time or making trouble, this benefits overall social stability.

Online shops actually shore up the real economy by supporting commodity circulation. Nowadays, many large companies also choose to cooperate with online retailers to promote sales. To reject online shops shows one's incapability to adapt to new trends. As a senior corporate manager, Dong is supposed to show tolerance to young online shop owners.

She Zongming (The Beijing News): Dong's remarks sound sensible. Indeed, the real economy is the bedrock of a nation's economy. As part of the virtual economy, Internet businesses should serve the real economy. If the virtual economy squeezes the real economy, eventually, the overall economy will be in danger if the virtual economy bubble bursts.

The concern is reasonable, but it's going too far to label young people's online shops as a "hidden peril." Only a small fraction of the young born in the 1990s are involved in online businesses. China has a diversified economic structure, under which the conventional economy is trying to reach a balance by means of reforms.

While more and more young people are beginning to open online shops, in many cases, it's not because they really want to do so, but because they have no other choice amid the tight employment market. Almost every year is said to be the most difficult year for recently graduated university students seeking employment. Those who have yet to find work may resort to opening online shops to make a living.

Although the Internet economy is severely affecting physical retailing, online shops and the real economy are increasingly interconnected. The production and distribution of the goods sold online by one young person involve perhaps 100 other young people.

Jiang Debin (New Express Daily): In a market economy, every person has the freedom to choose whatever job he or she is capable of doing. Young people choose to open online shops either because they want to start their own business or because they just want to live life without being restricted by all kinds of corporate discipline. You may dislike young people operating online shops, but they have the right to do so, and their choice should be respected.

China's economy faces the problem of overcapacity in many industrial sectors, and in the process of eliminating outdated industrial capacity, many workers are being laid off. Besides, some areas of economic activity have begun to replace human workers with robots.

People born in the 1990s have grown up in a time of plentiful resources, and most of them have developed a strong personality. They are full of ideas and are passionate to gain employment in which they can fully display their personal character and capabilities. Comparatively, they are not so concerned about income. Many factors have pushed young people to open online shops, and on the whole, this is a positive trend.

The Internet economy is not in conflict with the real economy. The products sold by online shops are produced by real factories. These shops are just a channel for consumers to buy commodities. Actually, online shops make it more convenient for manufacturers to sell goods. There are no intrinsic differences between e-commerce and traditional physical stores. They are just two different commercial models.

Daily life is already intertwined with the Internet. Doing business on the Internet is already an irresistible trend, and young people have every reason to engage in this kind of occupation.

Cheng Zhenwei ( The real economy is the major force to push forward a nation's overall development in that it strengthens the foundation of the country's economy, provides jobs and contributes substantial tax revenue. If most young people refuse to join the real economy, it really is a "hidden risk."

Then, is it right to put moral pressure on young generations just because they favor operating online shops? No one will feel good with a monthly income of 2,000 yuan, but to be a self-employed Internet entrepreneur means you don't need to be subject to rigid corporate rules and discipline. Besides, is the real economy really ready to embrace the young?

Low wages in early career stages are not a concern for a majority of young people, but how about the future? Manufacturing enterprises easily shed employees once their market shares drop. After contributing the best years of their lives to a company, workers may face unemployment. So why should young people devote themselves to companies instead of starting up their own businesses?

Understandable concerns

Wu Xu (Southern Weekly): While most people rebuke Dong's remarks, I agree with her. Take my own child for example. After graduating from university, he got a job as a general manager's assistant in a company but resigned after just three months. He complained about frequent overtime and being criticized by managers for any mistakes. He felt so tired and grievous that he finally decided to quit the job, arguing that many of his classmates had opened online shops and made easy money as their own bosses.

I had little choice but to give him a sum of money, which he used to open an online shop. One year later, however, he had lost the whole amount. He realized how unrealistic his business dream was and returned to the company where he used to work.

I understand Dong's concerns as a parent. When new college graduates want to be their own bosses by opening online shops, providing them with some initial funding is not the biggest problem for many parents. What they worry about is their children's unrealistic dream of business success and their unwillingness to work hard or subject themselves to discipline.

If a majority of those born in the 1990s choose to open online shops, manufacturing industries could face worker shortages. This will pose a hidden risk to the nation's overall economy.

Young people will probably find many problems in the goods they sell online, and maybe those who cannot tolerate low-quality commodities will turn to the manufacturing sector to produce better goods. The virtual economy itself is not bad, but too many young people involving themselves in it is a negative thing. Only the real economy provides the core strength that ultimately ensures a nation's development. 

Copyedited by Chris Surtees

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