China's answer to Silicon Valley is experiencing a surge in new technology companies as the world's most populous nation reduces its reliance on manufacturing.
Beijing's Zhongguancun district birthed 49 startups daily last year as innovation takes root in the country, Wan Gang, the nation's minister of science and technology, said Wednesday at a briefing for the National People's Congress in Beijing. China now has more than 1,600 technology incubators, Wan said.
Zhongguancun is home to a raft of established Chinese technology companies, from PC maker Lenovo Group Ltd. to search engine operator Baidu Inc. Xiaomi Corp., the nation's biggest smartphone vendor, was established in the district five years ago and has reached a valuation of $45-billion to become the world's most valuable startup.
"As innovation and entrepreneurship gain popularity, many high tech, small-and-medium-sized enterprises and micro enterprises are writing the wonderful story of Chinese innovation," Wan said. "Entrepreneurship has gradually become the spark that started a prairie fire."
The country now has more than 1,000 organizations investing in startups with capital exceeding 350 billion yuan ($56-billion), Wan said.
Along with the new companies, China is also experiencing a surge in technological innovation. The country had more than 660,000 effective invention patents last year, up 12 per cent from a year earlier, Wan said.
Xiaomi has already backed 27 startups and plans to fund as many as 100 new companies, Chief Executive Officer Lei Jun said March 6.
New Disruption The investments are designed to help Xiaomi expand from smartphones and tablet computers into smart home products from cameras to security systems and air purifiers, Lei said.
Traditional businesses in China are ripe for disruption by innovative startups, Baidu's Chief Executive Officer Robin Li said in a briefing earlier Wednesday. Internet finance is a "very hot" area for development, as services including banking, insurance and consumer credit can all be improved online, Li said.
"The market economy in China is only a few decades old so it is not very mature and not particularly efficient," Li said. "Using the Internet to do it all over again, we can see that there are many chances."