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A new kind of mimicry from Beijing’s ‘Silicon Valley’

ZHONGGUANCUN (China) — On the outside, China’s answer to Silicon Valley does not look the part: It is a crowded mass of malls selling electronic goods, fast-food joints and office buildings in north-west Beijing, bisected by congested highways.

ZHONGGUANCUN (China) — On the outside, China’s answer to Silicon Valley does not look the part: It is a crowded mass of malls selling electronic goods, fast-food joints and office buildings in north-west Beijing, bisected by congested highways.

But in these nondescript offices, China is nurturing a growing class of tech entrepreneurs and venture capitalists, whose promising start-ups are challenging the long-held idea that China’s Internet companies merely copy products of the West.

Beijing’s Zhongguancun district relies, instead, on a new kind of mimicry — of Silicon Valley’s culture. The new generation of entrepreneurs “isn’t copying US products”, said Mr Zhang Rui, Chief Executive of Spring Rain Software, which manages a popular mobile app providing health advice from doctors. “They’re studying the style, personality, management and funding of Silicon Valley.”

In additional, the entrepreneurs reject China’s traditional top-down corporate model, deference to management and emphasis on size.

In the district, young techies rub shoulders with a growing number of wealthy investors, many of whom are veterans and part of the first batch of Chinese Internet success stories, which thrived by aping the likes of Google, Facebook and Twitter while Beijing blocked these services.

Today, the emphasis is on entrepreneurs with new ideas. Incubators and coffee shops provide space, power and Internet connection. Sympathetic local officials also offer subsidies and help in dealing with the country’s notorious bureaucracy.

Zhongguancun’s network of entrepreneurs and tech executives from bigger firms increasingly connect start-ups with capital. That is a move away from the past: Chinese entrepreneurs often had to borrow from their families, while investors looked to tech conferences for novel ideas.

Competition is not as intense as in Silicon Valley, said investors, but it is catching up. “It’s easier to find the deals (than) before ... but it’s much harder to close (them) because of competition,” said Mr Fritz Demopoulos, an Internet entrepreneur who invests in start-ups.

Ms Ruby Lu, a partner at venture-capital firm DCM, which has offices in both Silicon Valley and Beijing, said she sees products emerging in China that have yet to catch on in the US.

The new generation of start-ups focuses on smartphone apps that cater to young Chinese, for whom smartphones are the primary form of entertainment, instead of TV or computers.

Still, while their emphasis is on China for now, some in the local start-up scene are looking abroad.

MomentCam’s founder and CEO Ren Xiaoqian said 40 per cent of its users are outside China, although the app’s English version was released only late last month.

The company allows users to turn photos of themselves into hundreds of different illustrations.

Innovation Works has two full-time employees in Silicon Valley and has invested in two companies run by Chinese entrepreneurs in the area.

Sungy Mobile, which recently listed on the NASDAQ, focuses on software that allows users to customise their Android phones.

“In the past, firms said, ‘I win China (and) I’m done’,” said Ms Lu. “I’m beginning to hear from companies that don’t just want to be a Chinese company.” Dow Jones

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