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BAOTOU, China (Kyodo) After a bankrupt state-run steel factory laid him off in 1995, Zhou Peng set up an auto repair shop, attracting customers he knew from his old job of eight years.

But the business didn’t run right because he didn’t know how to formulate a long-term equipment upgrade budget or stop workers from being exposed to poisons. And he would use roadsides as his workshop.

“At that time, I could do only that to live,” said Zhou, 35. “To survive, you have to rely on your skills.”

But Zhou’s business has taken an uphill turn since then, and the Japanese government claims some responsibility — about 873.5 million yen worth of responsibility to train people, including Zhou, to build small businesses in regions of China burdened by layoffs.

But from March, Japan wants no further part in it.

The re-employment funding for China is just a morsel in the aid money Japan donates to causes in developing countries every year.

But even as Sino-Japanese political hostilities simmer among the Chinese public, people who know about the training program say the contribution has helped northern China, where unemployment following factory layoffs caused demonstrations and other social unrest.

“We know it is Japanese money. People think of this program and think of the Japanese government,” said Zhang Xiangguo, one of Zhou’s teachers.

Despite the common misgivings about Japan among many Chinese over the war, he said that in Baotou, “there’s no animosity.”

In 2001, the International Labor Organization and the local labor department decided the city of 2 million people in the Inner Mongolia Autonomous Region needed help because its factories had been hard hit by layoffs following open-market reforms in the 1990s.

The ILO selected Baotou and five other northern Chinese cities with the same unemployment issues to open their “Start Your own Business” training sessions.

And Japan’s Health, Labor and Welfare Ministry agreed to fund the whole program from 1999 through next March. Students pay only for textbooks.

Japan supports the training most likely because it sees China’s job stability as a way to discourage illegal immigration, and cooperation as a way to increase chances of Sino-Japanese technical cooperation later, said ILO chief technical adviser and coordinator Yoshiyuki Fukuzawa.

From $50,000 to $100,000 in Japanese program money went to each city. Local governments were expected to put up money as well.

Zhou, because he had already started a business, made the recruitment cut along with about 60 percent of the applicant pool and took the 15-day class last April.

Some of the 28 teachers, all locals with business or managerial experience, taught Zhou and his 30-plus classmates to build up a small business in the market economy. They used ILO-published textbooks and workbooks geared specifically toward China and visited successful businesses in Baotou.

Their final assignment was to write a business plan, including a balanced budget and strategy to beat competitors.

About 90 percent of the 1,400 students have started businesses, usually stores or trading companies. Consequently, the program has gained fame around Baotou.

“The impact of this program is really big,” said Zhang, the teacher. “The effects on the economy are very obvious.”

Because of Chinese people’s basic education, including strong literacy, the program has worked well in China compared with other nations, Fukuzawa said.

Today, Zhou has a 260-sq.-meter repair shop with six employees and a storefront office that sells automotive oil and antifreeze. He said that despite competition from six larger auto repair shops, he makes money offering a 24-hour roadside service and retaining customers with work quality guarantees.

But Japan is pulling out of “Start Your own Business” because the scheduled period has ended, said a Japanese Embassy spokesman in Beijing.

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