China is an emerging country, look at the Chinese cars and apps like TikTok that are extremely popular. But whether it can sustain all that technological progress is the question: the number of startups has dropped to an all-time low.
In 2018, China had more than 50,000 new startups: companies with good ideas that are also trying to make it happen for the first time. That number has been decreasing in the years that followed. And quickly too: while there were 51,302 new startups in 2021, there may be 1,202 in 2024. There are several reasons for this: the coronavirus that was spreading, the bursting of the housing market and the fact that the government is sweeping tech companies due to fears of a monopoly or non-compliance with the rules of the Communist Party. The fact that there are also many tensions between the United States and China will not help either.
Chinese government
The government claims to have swept the broom and tech would have more room to flourish again, but for many entrepreneurs it turns out not to be worth the effort to set up their companies again. Especially because they feel that their money is the country’s money. If they do start something, the government interferes with their financial affairs (they are not allowed to simply transfer money abroad) and they are closely monitored. It does not feel like their own and that makes it depressing for many ex-entrepreneurs. And for a depressing sight in cities: business premises that were once bustling with startups are now empty. Some people talk about an entire industry that has died right before their eyes. The entrepreneurial spirit has… given up the ghost.
Startups: how allowed?
Once upon a time it was the cowboys, the pioneers, those who had made it, but those companies and that mentality are hard to find in today’s China, say experts in the field. Financial Times. This also has to do with investors. Shares of startups were bought by investors and the idea is that startups would buy back those shares if they did not go public on a set date or were acquired. However, things went so badly with the startups that venture partners tried to get their money through the courts. This also contributes to the fact that the startup world in China is simply no longer attractive for young dogs with a good idea. Or for older dogs who want to breathe new life into their good idea, it turns out.
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Source: www.bright.nl
