Startup Case Study

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ack Ma, Ma Huateng and Lei Jun – three Chinese entrepreneurs behind one of the country’s most successful start-ups. The founders of Alibaba, Tencet and Xiaomi are part of the changing Chinese landscape where start-ups are beginning to be celebrated and even encouraged by officials in Beijing. Has Chine been bitten by the start-up bug for good?

As China slowly started to open up its economy in the 1980s, its attitude towards business began to change. In 1997, government officials turned their attention to promoting large, mostly state-owned firms. The slogan “Grasp the big and let the small go” helped Chinese firms enter the global stage with a bang.

But more recently, the economic challenges have made the government consider its strategy
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The officials have talked about creating a “new wave of start-ups from the masses and grassroots”, with focus turning towards enabling a more entrepreneurial environment. The government, along with local officials, has introduced new tax incentives, provided more investment and established stipends for students running start-ups.

For China, fostering start-ups makes economic sense. The country is faced with increasing number of graduates looking for work – keeping the unemployment figures in check is essential to keep the country on the right path for economic growth. Therefore, the increasing numbers of success stories are helping to instil enthusiasm among young Chinese and encourage them to the road of entrepreneurialism.

Changing the
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Fostering the right policies

Despite the introduction of number of policies, officials in Beijing still have more to do to truly foster start-ups. When asked about the most important policy officials should implement in order to boost start-up culture in China, Ebersweiler told gbtimes, “China needs to adapt its Corporate Law to be closer to the US counterpart. It’s not terrible, but not awesome either.”

Furthermore, considering the nature of start-ups with its high failure rates, Chinese government should look into creating more backup nets. The country must encourage more lending for small businesses, as well as foster investment in start-ups – even outside investment.

“I still remember a time where nobody would have cut a $25k check to anyone in the country, so I’m happy that entrepreneurs have more opportunities to raise money,” Ebersweiler said and continued, “Let’s hope they are conservative and take the time to learn the hardships of running a

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