Nurturing startups and young entrepreneurs has been one of top focus areas for local governments in China in recent years.
Beijing, for instance, has set up the Innovation Street for startups in the city’s Haidian district, while Shenzhen has formed the Qianhai Shenzhen-Hong Kong Youth Innovation and Entrepreneur Hub (commonly known as E Hub) last December.
Given the geographical convenience and the incentives on offer, Qianhai has been touted as a good place for entrepreneurs from Hong Kong to develop their businesses across the border.
But questions have been raised about the actual situation on the ground and whether the reality does match all the hype.
The Hong Kong Economic Journal Monthly has attempted to answer some of the questions in its latest issue.
E Hub is the brainchild of the Authority of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, The Shenzhen Youth Federation and The Hong Kong Federation of Youth Groups.
Projects supported by E Hub range from make-up services to finance technology, and are more diverse in nature compared with the ventures at Cyber Port and Hong Kong Science and Technology Parks Corporation.
E Hub can provide resources for as many as 200 startups. Currently, around 30 startups have set up offices in the area, with a third of them from Hong Kong.
Rents are waived for the first year, and the firms can enjoy 50 percent rental discount in the second year.
The startups can also enjoy incubation services provided by E Hub. Young firms that have shown extraordinary progress will be eligible for 2 million yuan (US$320,000) subsidy from the Shenzhen government.
E Hub entrepreneurs would also be able to rent residential premises in the zone at lower-than-market prices.
An entrepreneur from Hong Kong said the living environment is perfect over there. Apartments are spacious and come with balconies, he noted.
Youth Entrepreneur Warrior is one of the companies that has set up a unit in Qianhai.
Founder Phoenix Wan pointed out that many Hong Kong entrepreneurs are eyeing the mainland market. However, he noted that most people are not familiar with the rules and environment there.
“We have heard of cases where young entrepreneurs were cheated,” Wan said.
“But as the E Hub project was launched by the government, many youngsters would see it as a rather safe stepping-stone to the mainland market,” he said.
3D printing startup Printact is another company that has joined the E Hub program.
Dr. Data Ng Cheuk-kwong, the group’s founder, said it would be easier for them to interact with mainland factories, and thus have a better control of quality.
The E Hub helps entrepreneurs with company registration and applications for necessary licenses. It also provides guidance on entry requirements, offering advice on matters such as joint venture requirements in some industries.
“It is hard to set all the things up by ourselves as we are unfamiliar with mainland rules, and it would also be very time-consuming to deal with various government departments,” Ng said, as he outlined the valuable services provided by E Hub.
Fiona, an entrepreneur from the post-80s generation, also found the E Hub project very helpful in raising her firm’s profile and business credibility.
E Hub also holds regular road-shows to enable potential investors meet with the startups.
Although there is only a notional border that separates Hong Kong and Shenzhen, cultural differences are evident, as reflected in some E Hub events.
For example, the pitching activities are rather informal in Shenzhen.
“The organizer said eight startups will appear on a day, but actually 12 groups showed up. They failed to control the time and run-down, letting the startup teams go on and on,” Fiona said.
“The activity was over-time by an hour as a result, and many potential investors left in the middle of the event,” she recalled.
Printact’s Ng said one must learn to put up with some difficulties along with the many positive factors if one wants to set up base in E Hub.
“There is nothing you can do about it, you either change it or accept it,” he said. “This is not our home turf.”
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