In China, there is a famous saying:
“In the sky there is the Paradise, on Earth there is Suzhou and Hangzhou”.
Yes, Hangzhou is beautiful. Yet this city is not a mere tourist attraction. It is also a paradise for innovation and technology companies in China.
The contribution of the entrepreneurs in this city is also unquestionable. From Lu Guanqiu in the 1980s (Wanxiang Group), Zong Qinghou (Wahaha), to Li Shufu (Geely) in the 1990s, to Alibaba and Netease in the Internet era, private entrepreneurs from generation to generation contributed their own blood, sweat, and tears to this city.
Whether it is a traditional manufacturing industry or an Internet high-tech enterprise, at least three generations of private entrepreneurs have their roots deep into the ground underlying Hangzhou today.
Let’s Look At The Facts
It is because of their contribution that from 2002 to 2017, the added value of Zhejiang’s private economy rose from 53.4 billion yuan to nearly 3.4 trillion yuan, an average annual increase of 13.1%. At present, the private economy has created 56% of Zhejiang’s tax revenue, 65% of GDP, 77% of foreign trade exports, 80% of jobs, and 90% of new jobs.
As the provincial capital of Zhejiang, Hangzhou is one of the fastest growing cities in the world and the strength of private enterprises is mesmerizing. On August 29th, the National Federation of Industry and Commerce released the Top 500 list of Chinese private enterprises in 2018. Out of the 500 companies, 93 were from Zhejiang Province (the most of any province in China) and 36 of those enterprises were from Hangzhou (the most in any city), for the 16th year in a row.
Additionally, at the end of 2017, Hangzhou had 163 listed companies, ranking the fourth in the country, only behind Beijing, Shanghai and Shenzhen. There are 23 unicorn enterprises with a valuation of more than 1 billion US dollars (each) in Zhejiang Province, 22 in Hangzhou, and 120 enterprises in the province with a valuation of more than 100 million US dollars, and 87 in Hangzhou.
Everyone Gets Their Chance
Of course, this is merely a fraction of the companies, entrepreneurs, and innovation that truly exists in a tech hub like Hangzhou. Much like the World Cup, these lists only reflect the best of the best, the cream of the crop, and those who go against all odds to win the gold. While this past summer 11 young players from France brought home the gold, there are many of talented and brilliant players who didn’t have the chance to compete this year, but yet are biding their time, training and working hard everyday to get their own moment on the world stage.
Hangzhou and the cities local ecosystem is the same. While Alibaba, Netease, Geely, Bosch, and handful of world-renowned companies make consistent headlines and new stories bringing the city into the international spotlight, there’s still an entire world of innovation at root of this tech hub who are working day by day, through sleepless nights and restless vacations to earn their own chance to live up to the expectations a city like Hangzhou has for them.
According to statistics, as of the end of 2017, there were 406,600 Small to Medium-sized Enterprises (SMEs) in Hangzhou, a net increase of 80,700 compared with the previous year. The total number of employees reached 3,611,100. In 2017, 85,000 SMEs were added, an increase of 28.41%. The number of newly established enterprises has reached a new record high.
Hangzhou has a great entrepreneurial environment and a strong ecosystem. Entrepreneurs from all corners of the country have come to Hangzhou to pursue their dreams. According to the data of the “2018 Hangzhou Innovation and Entrepreneurship Index“, in 2017, the growth rate of entrepreneurship in Hangzhou reached 12.23%, and the growth rate of entrepreneurial projects was 4.09%. The profitability of SMEs continued to increase, and the proportion of profitable enterprises increased from 62.71% in 2015 to 66.28% in 2017.
The private economy is an endogenous force for regional economic development. The private enterprises in Hangzhou have grown organically from small to large. The only question remains:
What exactly is Hangzhou doing differently from other cities?
For those who are interested, the answer to this question is also readily available:
For investors, Hangzhou provides a range of free special services for foreign investors, such as investment consulting, investment promotion, and investment protection. In terms of intermediary services in areas of finance, insurance, etc., investors can also easily access relevant business services that are in line with international standards.
How about for Startups?
Easy! Start-ups across the globe have no funds, no land, no office buildings, and, unfortunately, no status. This situation is simply not allowed in Hangzhou.
In addition to implementing tax and financial incentives for SMEs, Hangzhou has established numerous funds to guide social capital into innovation and entrepreneurship, alongside the city’s consistent support of innovation-oriented infrastructure, support systems, ecosystems, and much more. These take form in the shape of business centers, supportive funds & VCs, innovation centers, and the like. As you may have guessed…
nihub is one of them, and we chose Hangzhou for it’s never-ending pursuit of innovation, opportunity, and entrepreneurship.