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February 2012

1 post from January 2012

When State Capitalism Meets Bamboo Entrepreneurship - How Chinese Government-funded Incubators Start-Up

China's twist on business incubators may turn out to be an indispensable engine of innovation for its economy. Most observers would agree that in China, the government is far more hands-on in terms of shaping commercial activities than in the Western world. Home-grown, emerging multinationals such as Lenovo, Huawei and Haier are not only dominant players in substituting imports, but they are also groomed to become national champions, competing in the global market. With its state-owned enterprises operating in industries that the government deems strategic, China appears to be an archetypical example of what state capitalism entails. Yet, in reality, millions of privately-held, small firms thrive alongside these state-owned behemoths. No one knows exactly to what extent such unplanned entrepreneurial activities contribute to the country's fast-growing economy. But collectively, private firms employ most of the country's workers. Less than 15 per cent of the total workforce is employed by state-owned enterprises. As expected, the less centrally orchestrated private sector is usually more daring when it comes to experimenting with new practices. Spontaneous autonomous entrepreneurial activities have proven to be most effective in capturing fleeting market opportunities: Taobao (a Chinese-language website for online shopping), Sina Weibo (a Chinese microblogging website), Renren... Read more →