On the one hand, China has plenty of capital and a growing pool of start-up talent eager to repeat the success of Alibaba's Jack Ma, whose 16-year-old firm is already one of the world's most valuable. On the other, while Chinese leaders recognize the need to nurture start-ups to keep their country's vast economy growing, they have also been limiting some of the freedoms that often prove critical to producing successful new enterprises.
At this year's Harvard China Forum, whose theme was "Defining the Chinese Dream," leaders in technology and business in China expressed optimism that their country could replicate the success of firms such as Alibaba -- not to mention six-year-old smartphone maker Xiaomi whose valuation is nearing $45 billion and DJI Technology, a drone maker worth some $8 billion just six years after its launch and expected to generate $1 billion in revenue this year.
One such leader was Victor Wang, who in the mid-1990s co-founded a successful English-language teaching start-up and now invests in early-stage Chinese start-ups in collaboration with the powerful venture capital firm Sequoia Capital.
According to Wang, the Chinese government has been moving quickly to remove some legal and financial barriers to entrepreneurship, such as the requirement for government approval for listing a company in China (instead of just registering to do so like in the U.S.). Wang predicted this requirement will vanish by the end of the year.
If government officials really want to "shift the economic pattern from an export model to a consumption model, they have to make this happen," Wang said.