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Chinese President Xi Jinping is taking major steps to improve the country's economy as the trade war with the United States continues. In November, it enacted a number of measures to increase imports and liberalize key sectors of the economy, anticipating that China's imports of goods and services will exceed $ 40 trillion over the course of 15 years. coming years.
Innovation is at the heart of Xi's strategy to advance the "Chinese dream" of national rejuvenation, and policymakers in the country are taking steps to attract foreign innovators to China to strengthen the country's efforts to strengthen its position of global technological power to watch. In the face of increased economic pressure from the United States, China has recently launched an initiative to create an innovation community in Hainan.
Hainan, in the south of China, is a tropical island often nicknamed "Hawaii of China". Thirty years after its official transformation into a wealthy province by the central government, Hainan is coming out of the dark with the government's plan to make it a global magnet of technicians and digital nomads.
At the end of December, Haikou, capital of Hainan Province, held a three-day inaugural event for a new startup incubation program. A group of foreign "Chinese hands" came to the island to participate in the event bringing together 20 founders of startups and a panel of a dozen investment managers, mentors and mentors. Entrepreneurs from the United States, Europe, Australia, India and the Middle East. Alongside local R & D centers run by Chinese technology titans Alibaba, iQiyi Mobike and Microsoft, the new Fuxing Incubator is presented by its leaders and managers as an international venue of choice for those interested in the Chinese market. .
In April, Xi announced at the Boao Forum, Davos, Asia, the launch of a special economic zone and free port in Hainan, as part of its flagship Belt and Road initiative. Hainan, one of China's poorest provinces, is intended to "serve as a window on reform [and] promote the formation of a new model of openness ". The speech was a catalyst and since then, Hainan government officials have struggled to realize the president's vision.
"Hainan has been given the green light to take the reform further and deeper than ever before. They have the central government budget to get there, "said Nishtha Mehta, panel moderator at the Haikou event and an Indian national who lives in Shanghai and heads the business innovation teams.
Deng Xiaoping, the chief architect of the reform and modernization of the Chinese economy, and his famous "South Tower" in 1992, which preceded the transformation of Shenzhen from a small fishing village into a vast center technological development with nearly 12 million inhabitants.
From the perspective of history, Hainan leaders defend an ambitious vision for the island province. "Digital disrupters will be the catalyst for Hainan to become the epicenter of a technological ecosystem that could even one day rival that of Shenzhen," said Peter Yang, co-founder of PreShares, a venture capital firm. and manager of the Haikou Fuxing Incubator.
"We are not new to high-level conferences in China," said Matthieu Bodin, chief executive of Tech Stars, a US-based accelerator in China. "But success ultimately depends on the ability to implement big projects. I have the impression that they are serious about Hainan. "
President Xi's plans for Hainan make him a potential gambling changer for the island province, which will resonate throughout China. The founders of startups in Europe and Asia who have chosen China as a base for their startups are moving to Hainan to expand their customer base and find new growth drivers.
One of the foreign entrepreneurs I met at the Hainan "Entrepreneurship Festival" was WikiFactory co-founder Nicolai Peitersen, who came from Chengdu, where his head office is located. Peitersen is Danish and has three European co-founders. Their start-up uses artificial intelligence to enable manufacturers of physical components and hardware around the world to find a suitable manufacturer in China, and then use the company's solution for design and production.
WikiFactory, created in 2015, has received to date 1.6 million dollars from angel investors. In 2019, Peitersen and its partners plan to collect at least a portion of A $ 10 million in RMB to finance their core business in Shenzhen. When asked to explain the choices that he had made, Peitersen said China was the industrial arm of the world. "He's leading the global push for smart manufacturing. Chengdu offers a combination of pleasant lifestyle and a rich talent pool. But Peitersen and his team hope to expand their cross-border e-commerce services exponentially from the digital free trade zone and Hainan port.
I also met Milad Nouri, a software engineer from Nantes, France, at the Haikou event. Nuri has lived and worked in China for 13 years. Hangzhou has been chosen by four co-founders of India, China and France, as the basis of their start-up, YooSourcing. Hangzhou, an emerging technology dynamo located 150 km southwest of Shanghai in the Yangtze River Delta, is home to e-commerce giant Alibaba and 13 of 120 unicorns in the Greater China region, according to the Hurun Research Institute, a firm based in Shanghai.
Like Peitersen in Chengdu, Nouri and his partners in Hangzhou are interested in the prospects that Hainan can offer to their business. Nouri's YooSourcing service introduces tools such as crowd verification, machine-learning-based matching and instant messaging to optimize the match between wholesale buyers and sellers.
Why Hangzhou? "Contacts with Chinese entrepreneurs are easier here than in other big cities like Shanghai," Nouri said. "And also for the quality of life."
The China Daily, a newspaper reflecting the government line, announced earlier this week that Jack Ma, founder and chairman of Alibaba, and Pony Ma, chairman and CEO of Tencent, the two biggest titans of technology in China, had been elected chairman and vice chairman of an advisory council for the provincial government of Hainan. It is a political act that has been announced with great certainty by the highest echelons.
China pushes Hainan in the foreground and reinforces this exception with its heavy hitters, but pomp and fanfare will not be enough. To succeed, it takes substance, and we will only see it if the founders of foreign startups adhere to the story and have the feeling that Hainan is equating the playing field for them. It will certainly be an interesting development to watch in the near future.
Rami Blachman is the founder of the China Israel Accelerator (CIIA) in Shanghai and Hangzhou. He is also an International Business Development Advisor at AgriNation VC. Previously, he was a partner at Giza Venture Capital in Tel Aviv and Shanghai and led the international business development of the financial services branch of Zhejiang Zhongda, a conglomerate owned by the Chinese state.
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