China Wants Silicon Valleys Everywhere

“Ignite the innovative drive of hundreds of millions of people.” That’s what China’s Premier Li Keqiang called on all levels of government to do in a March address. With its industrial complex losing steam, the country must rely on innovation, especially of the digital kind, for new sources of growth. “You can see there are two Chinas. One is the old China that is slowing down in growth; there’s a new China that is driven by the Internet,” says Hans Tung, managing partner at GGV Capital, a venture capital firm in Menlo Park, Calif. “You know they need to grow the new China to offset the slowing down of the old China.”

The result of Li’s speech and other similar messages from the central government is that municipalities across China have designated areas in their towns and cities as special high-tech zones where entrepreneurs can enjoy the fastest Internet connections, government assistance in funding, and access to affordable software programmers from the closest university. Such zones can be found in many countries. What’s remarkable about China’s effort is its scale: As of March 2015, 129 high-tech zones had been approved by the State Council. “Are they all likely to become major hubs of innovation or technology?” asks Gary Rieschel, founding managing partner at Qiming Venture Partners. He figures the U.S. has four such hubs: Boston, New York, San Francisco/Silicon Valley, and Seattle. “Maybe China will ultimately have eight,” Rieschel says. “So most of them will not.”