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New policies help migrant workers start businesses in China

By the end of 2014, there were 270 million rural laborers working in Chinese cities. It’s thought that around 2 million of them have since returned home. But instead of returning to the fields, many are choosing to start their own businesses. We went to central China’s Henan province to see how the local government is supporting rural enterprise.

An job with a big salary in Guangdong province wasn’t as attractive to 45-year-old Tu Guangyong thought it was going to be. Tu had struggled as a migrant worker for 20 years and finally got a job with the annual salary of 200 thousand yuan. But in 2010 he decided to go back home in Xin county in Henan province and start his own business there.

Now he has 5 factories with over 200 workers producing buzzers, loudspeakers and sirens. Most workers in his factories are women who were left behind when their husbands migrated to a city for work. He even built a kindergarten to take care of their children.

“My dream was to start my own business and change my hometown for the better. That’s why I didn’t return to the fields when I came back. Thanks to the government’s support, I finally made it. The next step is to grow my company, hire more women whose husbands are away working in big cities, and build a larger kindergarten,” Tu said.

Tu is not the only rural entrepreneur in his hometown. More than 3000 migrant workers have come back to start their own businesses in this mountainous county.

53-year-old Chen Jianping used to be a farmer. He went to Guangdong province to improve his family’s livelihood when he was nearly in his 30s.

Now Chen is the owner of several toy-making plants and employs over 800 local people in Xin County.

“Money was the biggest problem when I tried to start the business. I borrowed from my relatives and friends. And the local government gave me some loans. Now I enjoy an annual profit of over 6 million yuan. My plan is to enlarge my business,” Chen said.

Today more and more migrant workers can be fair well to be their migrant life. They start their own businesses in countryside. Local government in Xin county simplifies the registration procedures, and provide more favourable and physical and tax policies for the migrant workers turn entrepreneurs.

So far, Xin County has 380 companies established by the returned migrant workers, employing more than 13,000 people. Over 20 companies have their registered capital of above 5 million yuan each.

“We’ve always been ready to support more and more returning migrant workers in recent years. The government encourages rural banks to provide them loans when they need money, and introduce these startups to private investors. And we also invite the experts to give these rural entrepreneurs free training sessions to help them know the market better, be risk-conscious and improve themselves,” said Xiong Jianxin, deputy county chief of Xin County, Henan province.

Last month, the State Council released a set of guidelines to encourage migrant workers to start businesses in their hometowns.

The government has promised easy business registration and will even allow them to participate in rural infrastructure development and public services.

With more favorable policies, many believe the number of rural entrepreneurs will only increase.