What’s the difference between the new China and the old?
Answer: the internet.
Every time Hans Tung, managing partner at GGV Capital, is asked that question, he puts it down to China’s online revolution.
There are two Chinas, he says, “one is the old China that is slowing down in growth, but there’s a new China that is driven by the internet”.
In March, Premier Li Keqiang urged Chinese to “ignite the innovative drive of hundreds of millions of people”.
The result of Li’s speech — and other similar messages from the central government — is that municipalities across China have designated areas in their towns and cities as special high-tech zones.
Here, entrepreneurs can enjoy the fastest internet connections, government assistance in funding, and access to affordable software programmers from the closest university, according to Bloomberg.
Such zones can be found in many countries. The US has four such hubs — Boston, New York, San Francisco/Silicon Valley and Seattle.
But what’s remarkable about China’s effort is its scale. As of March, 129 high-tech zones had been approved by the State Council.
Gary Rieschel, founding managing partner at Qiming Venture Partners, thinks China will ultimately have eight.
This drive to promote internet development isn’t a guarantee to reviving China’s economy, says Valentine Ding, managing director of ATF Capital, which focuses on tech-sector investments.
“If these start-ups can’t create a real connection with consumers,” it will create an even worse employment picture for the locals when the bubble crashes,” he says.
City officials in Changsha, capital of Hunan province, are doing their best to nurture their own Silicon Valley.
Changsha’s high-tech zone is 15 times the size of New York’s Central Park.
With homegrown champions such as Baidu attracting top talent, Beijing’s Zhongguancun high-tech district has since 2003 created the most software companies valued at more than US$1 billion each.
Only the US has created more, according to venture capital investor Atomico.
That’s something Changsha doesn’t yet have.
Zhou Jieliang, 21, says the “overall start-up vibe in Hunan isn’t that great right now”.
Zhou, a university student in Changsha who co-founded an online education platform there, says she spends more than half her time in Beijing, Hangzhou, and Shanghai.
The contrast with Changsha is “quite stark,” she says.
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