12,000 startups are being created every day in China [video]

[ericjang]

Fascinating documentary, thanks for sharing! If I understand the business model correctly, isn't the 融道网 (Roadoor.com) 9.00% guaranteed principal + interest mentioned in the documentary considered a Ponzi scheme in the US? How much of the return on capital is from RoI from investment into companies (exits, dividends, organic growth) vs. just increased AuM from (老百姓) investors?

Edit: just realized that businesses requesting loans to 融道网 are screened prior to being made available to public investors, so the deal flow appears to be capped by available business opportunities.

[smaddox]

Yeah, just like mortgage lending prior to 2008 was "capped" by the availability of quality debtors.

[chvid]

9% pa. guaranteed by a bank is amazing in a strong currency like the yuan.

It is not a ponzi per se since money actually flows into real investments; however there is probably a "systemic" risk at the level of the Chinese economy as whole.

Funny that this excellent documentary is made by the Japanese national TV channel NHK. There is quite contrast between China and Japan today wrt. speed, risk taking and growth.

[dvcc]

So I had some doubts about the numbers at first, but a rough quick calculation 12,000 / (1.3 billion (people) * .5 (age 25-54)) ≈ 0.002% of the available population a day creating a startup (1 in every 50,000) which does not seem too far-fetched, but still seems a bit high to be honest.

[gentro]

The documentary is about fintech innovation driving funds to SMEs. Their examples are a kiwi producer, a fish farm, and and a steel welding company. What they probably mean is that 12,000 businesses are started in China every day, not necessarily all tech related.

[kitschshrine]

it's a lie, much like the government's made up 7% gdp growth.

"China's liaoning province admitted that it inflated GDP figures from 2011 to 2014"

https://qz.com/887709/chinas-liaoning-province-admitted-that...

[contingencies]

I probably only know a few hundred people here, and there are multiple people starting businesses every year.

1 in 50,000 per day = 1 in ~136 per year. That sounds about right, perhaps even low.

[da02]

I agree. Even if the number is too high, I wonder about the failure rate.

[ausjke]

my friend went there and opened one a few years ago. it's relatively easy to open one I was told

but it's super painful to close that, even though it's a small startup and financially clean, still do not know how he could ever close that, many procedures, paperwork, financial check everything he could not supply as a small player,etc. it's just impossible to close i guess.

basically it looks to me that it's a easy-in-hard-out process.

[kitschshrine]

Why would any foreigner want to start a company in a country that

- requires you to give up 50% to a local partner

- blocks internet access to foreign websites (thus foreign customers)

- can take away your business/assets/customers without trials

- treats foreigners as a mere entity to steal technology and clients from?

[allenleee]

Yeah its relatively easy, but its way more competitive than other environment in Asia. "Connections"matter.

[elmar]

"but it's super painful to close"

China the Hotel California of SME's

[kitschshrine]

And yet just today...

"China’s sprawling Internet censorship regime is harming the country’s economic and scientific progress, a senior official has said in a rare public rebuke of long-standing Chinese Communist Party (CCP) policy."

http://www.taipeitimes.com/News/front/archives/2017/03/05/20...

So they're creating alot of startups that probably are just copycats of what's existing. Not surprising considering China really isn't known for innovations.

[da02]

It's most likely a jumping off point. One way to learn painting in the past was to copy paintings made by masters. So as the economy develops and more people can afford to take risks, innovations should be more common (unless govt intervention prevents it). Japan was viewed upon as a land of where cheap imitations were made.

[matz1]

Also not surprising that one of the most effective way to good at something is to imitate how the expert do it.

[mrweasel]

China really has to do something to create their "own" companies. If they do nothing and the rest of the world decide to move manufacturing, either home or elsewhere, China will go back to be a poor 3rd. world country.

No one will be keeping their business in China due to not being able to get the same quality else where, or because the Chinese is such nice people to do business with. So it makes sense to fund and encourage new businesses so China can start to produce their own product, and not just be a big factory (and copy machine).

[idra]

China has never stopped being a poor third world country.

[omarchowdhury]

Here's an example of one of these startups: https://www.aiadvertising.org/

[zhte415]

Is this a parody? It is far better done than most China serious companies with similar delusions.

[aisofteng]

> online marketing optimization articulately convolutes into data analysis stream

Beautiful.

[DragonTurbino]

It will be interesting to see how this will evolve and what impact will have it on US in long term.

[pcurve]

Definitely skip the first 20 minutes or so. It's not just funding VR and what's obviously bubble areas.

Many investment companies are also making small loans to traditional industries like metals, farm, and fisheries. Fascinating stuff.

[cscurmudgeon]

Not all businesses are "startups", the way the word is used in the West.

[OJFord]

'Startup' comes from 'start[ing] up a business' - so 'startups are being created' doesn't strictly speaking make sense, or at least calling them 'startups' isn't adding anything not provided by 'created'.

You're right that the word is increasingly used to refer to SMEs that have been around years, are stable, etc. - just because it carries weight as a buzzword. But in the context of newly created businesses, that's exactly in-line with proper/original meaning.

(A better title might have been '12,000 new startups in China every day', or equally '12,000 businesses created in China every day'.)

[sametmax]

Again i feel like everybody is using the word start up to replace the word business.

[myprasanna]

I feel like these people have no clue what they are investing in. Is it just me? :)