Unleashing Ideas in Beijing
Jonathan Ortmans @jortmans
Nov 23, 2009
Despite being one of the most powerful emerging markets (9% GDP growth in 2008), being an entrepreneur in China can be a challenging endeavor. According to the Index of Economic Freedom, investment freedom, financial freedom, and property rights are all relatively weak. And the World Bank outlines many challenges of doing business in China from starting a new business (it takes 37 days), to paying taxes (businesses spend on average 504 hours on preparing, filing and paying taxes), to enforcing commercial contracts (expect 406 days until payment).
My visit to China for Global Entrepreneurship Week suggested things are changing fast. While the state still guides and directs much economic activity, especially concerning key infrastructure industries, efforts to embrace market principles are clearly being made to allow more response to market forces by enterprises and individuals. Entrepreneurship is most certainly encouraged by the government which is eager to turn China into a global leader in innovation. R&D expenditure is high (1.4% of a $4.402 trillion GDP), ranking the country 18th on this variable in the 2009 Legatum Prosperity Index. Another optimistic trend is a recent infatuation among the Chinese to embrace individual entrepreneurial activity. According to 2007 Gallup polls, more than one in four Chinese, including almost 3 in 10 urban dwellers, expressed an interest in starting and owning a business.
I am a witness to this fascination. This week’s participants in Global Entrepreneurship Week activities have been eager to embrace a more open source, risk-tolerant culture. One event included an impressive celebration of entrepreneurial spirit that engaged over 1,000 young people and a number of VIPs from the Chinese government. Amidst speeches and accolades, it also served to debut the Music Drama “Forever the Moment”, which was composed and directed by undergraduate students. The drama embodied the theme of the event – to deliver inspiring stories of entrepreneurship in an artistic form with the goal of rooting the entrepreneurial spirit in society. While GEW in China has been slow and cautious to go to the scale of say Brazil, activities in more than 20 provinces this showed momentum is building – especially among universities.
To end the Week, I addressed a summit of leading entrepreneurial venture capitalists, scholars and policy makers, as well as many SME owners in China, who gathered for a day of in-depth, path-breaking discussions on the entrepreneurial economy society in China. The event was co-hosted by The Founder, China’s most influential magazine on entrepreneurship, who while I was there also launched a Founders Club of Chinese start-up entrepreneurs who used their own money and Founded an effort not initiated as a state enterprise. Discussions held worth noting include everything from the future of clean technology, to developing the second board market in China, and unleashing the power of entrepreneurial cities. Several keynote speeches were on the agenda here today, including Yan Junqi, vice chair of the standing committee of the National People’s Congress and chair of Entrepreneurship Foundation for Graduates, and Wu Jinglian from the Developmental Research Centre of the State Council and member of CPPCC Standing Committee. Following my address to this final celebration of China’s Global Entrepreneurship Week was a dinner and awards ceremony, where I handed out an award to the winners of “China’s Future 50 Entrepreneurs.” The sheer scale of the enterprises these entrepreneurs are building is astounding. When Chinese entrepreneurs succeed, they do it big.
For example, I spent a great deal of time with Dr. Zhengrong Shi, Chairman and CEO of Suntech Power Holdings now listed on NYSE Euronext who has from scratch using his own money at the outset built one of the first successful Chinese brands in the US in the solar power industry. Feng Jun is doing the same in electronics with Algo – a start up that not only sponsored the Beijing Olympics but was also the first Chinese company to sign up to sponsor London coming up. And there is Victor Koo who founded Youku.com, the You Tube of China and Wang Wenjing the CEO of Ufdia Software which was described to me by several people independent of each other as the SAP of China. I could describe so many more “founders” I met from David Zhu, CEO of SNDA the new gaming company to Fan Bao, CEO of China Renaissance. China is breeding entrepreneurs and the more than 1,000 people that attended the GEW Closing Ceremonies were all encouraged not just by but by the government that sets the tone, to puruse entrepreneurial activity,
President Obama’s visit this week to China has clearly set a positive tone for China’s relations with the rest of the world and that speaks well for entrepreneurship. This economy will continue to soar as barriers to business creation and growth are slow removed and managers are encouraged to take more risks both in state-owned and private enterprises. With the right ingredients, and a fostering of these components, China’s growth rates even during the recession have been envied around the world. It is now emerging as a nation that can also be proud of having a new wave of high impact entrepreneurs. Given all boats rise on an incoming tide this is good news for the global economy.