BEIJING (Reuters] – Chinese students can get loans up to half a billion yuan ($78,000.00) from Zhejiang, a wealthy province in China, to help start a business. The government will also pay at most 80% of any loan if the venture goes bankrupt.

At a press conference held by China’s State Planner on Thursday, the generous plan highlighted official concern about employment prospects for millions of Chinese graduates, in a labor market that is tightening due to slower economic growth.

Zhejiang serves as the “common prosperity drive” testing ground. This province is a major manufacturing center by the coast and has been given the task of piloting policies that will reduce income inequality by 2025.

Chen Zhong, Vice Director at Zhejiang’s Human Resources and Social Security Department said that if graduates’ startups go under, they can get at least 80% and 100% of the loans if their loan amount is below 100,000 Yuan.

Students who are graduates of college can receive a living allowance as well as housing subsidies ranging from 20,000 to 400,000.

The college graduates make valuable human capital… Chen explained that there are over 10 million college-educated graduates this year. This is an excellent opportunity for all of us.

According to the National Development and Reform Commission, last week the central government announced it will provide special assistance to young entrepreneurs and offer incentives for small firms that employ new graduates. The country’s record number of 10.76 million is expected to be reached this year.

According to Chen Chen, new graduates from Zhejiang can now obtain a “hukou,” or residency without strings attached. However, there would be restrictions for those seeking a hukou downtown Hangzhou.

Hukou is a policy that aims to ensure urban resources do not become overwhelmed by migrants. It imposes limits on homeownership and provides benefits for those who live out of town.

The majority of college students’ projects don’t work. A Shanghai-based venture capitalist said that the money they receive may not be used for anything other than setting up street stands.

($1 = 6.3358 renminbi)