An advertisement for business startup loan. [Photo/IC]

An existing favorable policy for business startups in East China's Zhejiang province that an official recurred to on Thursday has sparked new positive discussion online.

Chen Zhong, deputy head of the province's human resources and social security department, told a news conference that the province will compensate college graduates for loans if they fail in starting up business.

College students who want to start a business can take a loan between 100,000 yuan ($15,778) and 500,000 yuan. When they fail, they can get all money compensated if the loan is less than 100,000 yuan. If the loan is more than that, the government will compensate 80 percent of the part exceeding 100,000 yuan, he said.

The policy issued in 2015 said that a provincial unemployment insurance fund guarantees the compensation.

Social media comments hailed the province's business environment and some said they want to go to Zhejiang to start up a business.

"Zhejiang welcomes college graduates from all over the country to seek for chance of employment and entrepreneurship," Chen said at the conference.

Chen added that college graduates who work in Zhejiang can apply for 20,000 to 400,000 yuan for living, housing and rental subsidies.

The government gives 100,000 yuan of entrepreneurial subsidies to graduates engaged in housekeeping, nursing and modern agricultural sectors.

For those who work in the sectors, the government gives each graduate 10,000 yuan of employment subsidy for 3 years, he said.