China remains a Booming Startup Scene
Finding a job after graduation in China isn’t the only way to achieve career success nowadays as more and more students choose to set up their own companies as soon as they step into the professional world. Even some successful professionals decisively gave up their good condition and job to join the entrepreneurs’ world. China has entered a good era for startups because of government’s encouraging policies and abundant funds in the market. Good projects of tech-innovative companies are also partnering and helping each other, in order to get a sustainable and trustable business.
Government’s policies help to finance the innovative startup
The government has published several policies to facilitate innovative startup especially for small and medium-sized entrepreneurs to finance their project in order to maintain the country’s high economic growth. The current Premier of the State Council of the People’s Republic of China, Li Keqiang proposed to develop the “twin engines” focusing on entrepreneurship and mass innovation, alongside by increasing supplies of public goods and services in the government work report written on the 2015 National People’s Congress annual session. Therefore, the Chinese government has already taken action to reform investment system in order to attract social capital investment for key projects. It also encourages qualified private capital to initiate the establishment to small banks according to the Chinese law. Structural tax cuts will continually be implemented to reduce the burden of companies. The plan is to set up a fair and unique national technology management platform to protect intellectual property right. Moreover, the state council also announced that 40 billion of RMB fund will be established for venture capital investment in emerging industries, which will bring even more innovation to the Chinese economy and upgrade its traditional industry. All these measures show the government’s wish to create a better environment for entrepreneurship and mass innovation so that startups can have more resource and structure to accomplish their ambitions.
Abundant funds create opportunities for startup
Apart from State-backed venture capital funds, dominants player funds like BAT (BAIDU (In Chinese: 百度), ALIBABA, TECENT) and angel investment funds are quite generous when financing excellent startup projects, which represent a precious opportunity for startups to develop their business in such a competitive market. Statistics shows that there are more than 1000 investment agencies fund entrepreneurs in China, holding a capital sum of over $56.8 billion. Entrepreneurs can obtain different ranges of funds from tens of thousands of dollars to tens of millions of dollars according to their projects value. Moreover, these investors have not only money but also rich experience in the business environment. Some of them are successful pioneering entrepreneurs who’ve already gone through many problems when started their companies. Some of them are the second-generation rich person who has years of practice in the market following their elders. They provide entrepreneurs with money and critical suggestions as well as helping these young startups to take the correct strategy. Thus, startups can be quickly on the track and avoid detours in order to grab the opportunity of rapid development.
Tech-innovative companies are the major force of entrepreneurs
Complying with the national demand of innovation and market trend, tech-innovative companies are springing up in China. The Internet, new technology, and innovation have become Chinese new economic growth point. New startups are usually the combination of these three elements, which interest a lot the Chinese investors because of their huge developing potential. Revenue of these companies tends to have higher growth model compared to traditional industry so that even American investors are willing to buy their stocks. The services offered by these companies always aim at making people’s modern life easier and quicker, which are warmly welcomed by Chinese citizens. For instance, Elema, a famous takeaway food website who changes Chinese eating style, has already completed its round of financing with 0.63 billion of RMB in 2014. DIDI taxi like Uber has also accomplished its round of financing with 0.7 billion of RMB in the same year. There is no doubt that companies such as Elema and DIDI who have high revenue, investors’ interest and people’s demands, emerge constantly and develop quickly.
Entrepreneurial tide gave birth to startup offering services to startup
An interesting phenomenon appears along with the boom of Chinese startups, giving birth to new B2B opportunities, it is generally startup who offer services to other startups. For instance, DAYDAYUP which is targeting startups with an international vision, intends to build an international collaboration community to connects all the entrepreneurs throughout the world. It also helps entrepreneurs to set up an office in different Chinese cities such as Beijing with several additional services including company registration, staff recruitment, and promotion. If you enjoy reading this article and would like to know more about China and its market, contact us!