China’s Tech Start-up Boom

China has the second largest consumer market in the world. Its population of 1.35 billion, of which more than 50% live in urban areas, will generate an estimated GDP growth of approximately 7% over the next 10 years. Around 375 million internet users have mobile Internet access and are among the most active consumers of e-commerce, social networks and online gaming. Online shopping alone will skyrocket e-commerce volume to 16% of retail sales by 2020 and transform China into a global leading market for travel, advertising, film, luxury and cosmetics. Given these remarkable numbers, it comes as no surprise that recent reports indicate a shift in favor of tech companies and digital marketing in China. And the tech scene in China is literally exploding in terms of dimensions and creativity.

The Chinese government is paying close attention to scientific innovation, entrepreneurship and new forms of services. With a broad range of monetary investments, consultation support, facility construction or marketing and administrative assistance for new start-ups, 1’600 incubators established more than 10’000 new start-up companies in 2014. New technologies like “Big Data” or “Cloud Computing” provide a lot of new business opportunities as they lower the barriers for students and young entrepreneurs. Statistics have shown that the Internet industry has greatly contributed to the 13.22 million new urban jobs China created over the last year.

Another factor that adds further impetus to Chinese start-up companies is an adapted education system, in which more than 65% of all students graduate in the fields of natural sciences and engineering. In Beijing alone, around 200’000 people receive university degrees each year. Professors and university administrations alike are financially and legally encouraged to allow students to set up new companies within a reasonable amount of time. In March 2014, the Chinese government passed a new law designed to reform the entrepreneurial ecosystem. In speeding up registration procedures, it shortened streaming lines for new start-ups by two thirds.

Zhongguancun, for instance, is the first high-tech and innovation park in China that attracts entrepreneurs, investors and start-up companies. Located in the northwestern part of Beijing, it is considered to be China's Silicon Valley and has developed an network where engineers, programmers and investors can easily interact with each other. Some of the start-ups based in Zhongguancun are now worth billions. Another example of how active the government has been involved in the business of start-ups is Z-innoway (Zhongguancun Innovation Way), formerly known as Haidian Book City. Once a quiet walking street lined with bookshops, it currently boasts 9 accelerators, several co-working entrepreneurial spaces and customized start-up training programs.

Besides government driven investments, private investors and incubators also participate in R&D projects of technology companies. The Chinese online market has three major private-owned companies; Baidu, Alibaba and Tencent (BAT). They have been steadily investing in new tech start-ups. Three years ago, WeChat (Tencent) set foot in the market and is now the most successful Chinese messaging app including millions of users abroad.

Notable Chinese start-ups:

• Momentcam, a free app developed in China which transforms photographs into caricatures, was temporarily the best-selling app in the App Store in 18 countries.
• Yikuair, has developed a marketplace combining social, local, mobile and commerce in an effort to help connect online/offline merchants and consumers. It offers them special deals through a distinct micro-payment system powered by Sina Weibo, the No. 1 Chinese twitter-like service.
• Senscape Technologies, a leading technology company in augmented reality (AR), computer vision and smart recognition.
• Eayun, is a pioneer in providing cloud infrastructure solution that simplifies and accelerates the deployment, management and utilization of private and public cloud services. Eayun was founded by 3 EPFL graduates in 2011 and is still working closely with EPFL and a R&D center based in Lausanne.

Sources and useful links:
• CKGSB Knowledge (
• China Tech News (
• South China Morning Post (
• Zhongguancun (
• Tech Temple (
• 36Kr (
• International platforms such as Techinasia, Techcrunch, Venturebeat, etc.

- Contributed by Nektarios Palaskas, Head of Science, Technology and Education Section, Swiss Embassy in the People's Republic of China