Concerns have been raised by Shanghai deputies to the National People's Congress about the use of taxpayers' money to guarantee low-cost loans for new graduates.

As part of the national government's economic stimulus policies, new graduates wanting to start a business can apply for low-cost loans from state-owned banks and be granted a free business licenses without a reserve pool of 500,000 yuan (US$73,135) in their business accounts.

Deputies to the congress argued that most new graduates had little business experience and therefore many start-ups would fail.

"Very few new graduates succeed when they start their first business right after leaving school," said local NPC deputy Yan Chengzhong.

He said the small number of start-ups that succeed would keep their profits while the cost of failures would be paid by the taxpayer. "This is no long-term solution to the problem of new graduates finding work," he said.

Yan and other deputies said the local government should create more volunteer, trainee and internship programs designed for new graduates. NPC deputies said graduates needed to build up experience before they could manage their own business.

Yan proposed a "professional volunteer scheme," open only to new college graduates, that would set high entrance requirements, pay a small wage and offer work experience in Shanghai and other provinces specific to a graduate's college studies.

Wang Xia, an NPC deputy and a company manager, said a large number of graduates only hoped to find jobs "based inside offices and management-related" and frowned at positions they considered trivial.

The local legislators proposed in a draft law that state-owned companies and government agencies should be encouraged to give priority to those with a good record of unpaid social volunteering work, such as helping local charities, or at events such as the Olympics or the Expo.

(Shanghai Daily February 24, 2009)