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Business / Talking Business

Fair wind blowing strong for startups in China

By MAN RANJITH (China Daily) Updated: 2015-07-16 08:36

It's the question I face most often from my peers: "What's really driving the Chinese economy?"

In the past, my answer would have been simple: "Exports and a solid backbone of State-owned enterprises."

But of late, I have changed my view, against the backdrop of a new wave of entrepreneurs and private businesses, which have firmly placed the nation on the path of global innovation which is now fueling a new era of high-tech dreams.

Not surprisingly most of my Chinese colleagues tell me that SOEs are no longer the prime movers of the job sweepstakes.

Instead, everyone wants to work for a startup, particularly in sectors like artificial intelligence or on applications that can genuinely make a difference to everyday life.

Clearly the glittering successes of Jack Ma and Pony Ma have rubbed off on China's increasingly affluent millennials.

What also seems to be egging on most of these young minds is the famous Silicon Valley adage, that even if you fail, you will eventually find your feet and succeed.

Indeed, history is replete with the likes of Android, Facebook, Uber or Dropbox that were once dismissed by Silicon Valley bigwigs as startups with little or no chance of success.

Time has proved the pundits wrong and the eventual success of these firms has seen the start-up culture spreading fast across China.

Little wonder, China is now at the forefront of entrepreneurship in Asia, with more young graduates than ever giving up lucrative corporate careers to start out on their own.

Beijing, Shanghai, Shenzhen, and Hangzhou are teeming with several firms working on a whole host of self-generated ideas, and they are fast overtaking their peers in Singapore, Bengaluru or Kuala Lumpur in innovation.

Andy Mok, the founder of Beijing-based Red Pagoda Resources, which invests in and provides professional services to startups in China, tells me that this startup mania is actually unleashing more young brain-power.

He himself gave up a successful career with the United States-based Rand Corp, and describes himself as a man wearing many hats. Not only is he a former Wharton alumnus, but also an angel investor, a guide, counselor and adviser for several startups in Beijing.

"It is fascinating to work with so many young minds and watch them take their own baby steps to success," he told me over a glass of beer at his new office in east Beijing, which can seat around 200 startups at a time.

According to Mok, more and more new inventors are turning up at the weekly match-making sessions his company organizes.

"We have inventors with mobile applications, social networking apps and even developers of medical applications at these meetings, mingling with some of the biggest names from Silicon Valley and prospective investors.

"We also have local government officials attending to answer questions and offer help with any issues the inventors may have," he said, adding that Beijing is already dishing up just the right mix of services to create a strong startup community in the capital.

According to a recent State Council statement, "Innovation and entrepreneurship are of great importance in accelerating China's economic restructuring and the creation of a new growth engine.

"These are the new sources of China's economic growth and will help to build a rich, fair and strong nation."

One of the programs that has already made waves in Beijing's startup circles is the Overseas Talent Entrepreneurship Conference, a platform launched by foreign and returnee Chinese entrepreneurs.

According to Mok, the OTEC's aim is to create a flourishing startup ecosystem that can act as a key resource for prospective entrepreneurs.

Chua Kee Lock, group president and chief executive officer of Vertex Venture Holdings Ltd, a subsidiary of Singapore-based Temasek Holdings Pte Ltd, revealed recently that the republic's sovereign wealth fund has also been scaling up its investments in China, as it sees the country at the forefront of innovation.

"Chinese companies can create interesting opportunities by themselves; and in that sense, they are a lot stronger than others," he said.

"China is fast closing the innovation gap because of its large market size and these companies are now able to create their own unique business models and capabilities."

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