Listening, and caring seems to be two key elements in Hangzhou's success. Sweet!
"Unlike the government support in Silicon Valley, which sometimes prioritizes tech innovation at the expense of public living conditions, Hangzhou’s government sees quality of life as a critical strategy for attracting companies and talents."
"Hangzhou lacks at least four of these elements, with no clear advantages in venture capital, human capital, university-industry ties, or industrial structure"... Please, you should check on this. Have you heard about Zhejiang University, N3 of China and N1 in overall budget? Precisely, ZJU has developed a model of building specific ecosystems with the tech, medical, space, and other key industrial sectors. These ecosystems are linked to banks and massive donors (like Alibaba) that have developed huge incubators for start-ups like DeepSeek. Anyway, great piece, catching some of Hangzhou essence and incomparable charm.
Yes and no...China probably have 5+ universities who claim that they are the No.3 after Tsinghua and Peking, though ZJU is definitely a strong candidate. I think it is fair to say that ZJU has a good relationship and ecosystem, but Tsinghua or Shanghai Jiao Tong is probably better than this. And DeepSeek did not directly spinoff from ZJU like Zhipu from Tsinghua. So overall ZJU is great, but it is not Stanford.
The “waiter government” image stuck with me. The shift from enforcer to enabler feels like the real story here. Hangzhou didn’t outbuild, outfund, or outcredential Beijing and Shanghai. It just out-listened.
What’s most striking is how little of this story depends on traditional innovation metrics. No major VC surge. No elite university cluster. No military-industrial complex. Just a local government with enough humility to serve rather than steer, and founders bold enough to build without waiting for permission.
Can this kind of “low-ego governance” scale? Or does it only work in places that are still overlooked, where being the “only child” still feels possible?
Isn't nannying companies exactly what the Singapore Economic Development Board does? But Hangzhou is more successful than Singapore, so presumably access to a large domestic market is an additional requirement for their model. Suzhou really missed an opportunity then.
I expect the great analysis and comparisons of how/why Hangzhou is in this position, but the personal story at the end and the pictures included really helped me get a sense of place. Really good work.
The U.S. has Silicon Valley, Seattle, and Austin. They all contribute different things to the American tech sector. The same can be said for China, which has Shenzhen, Hangzhou, and Shanghai. They’re all contributing to China’ economy thriving tech industry.
Overall good article on Hangzhou, but I believe this severely misses the mark:
"Unlike the government support in Silicon Valley, which sometimes prioritizes tech innovation at the expense of public living conditions, Hangzhou’s government sees quality of life as a critical strategy for attracting companies and talents."
Any time in the valley will impress upon you that local governance is borderline antagonistic to any successes of the money and developments the tech industry has brought them. There are historic vestiges of Cold War funding via Stanford and Cal for sure, but try and build so little as an apartment building in SF proper (or even a dorm for Berkeley students across the Bay) and see how far you get. Tech over the last 20 years there has succeeded in spite of local governance, not because of it (though Lurie at least seems to be moving in the right direction as of late)
Most of the tech elite in Silicon Valley want to turn it something closer to a Singapore on the bay, but are hamstrung by the landed gentry and historic interests which keep the world's #1 innovation hub looking more a glorified suburb
> As Qin Shuo 秦朔, a Chinese business thinker and former CEO of China Business News (CBN), notes, DeepSeek stands out for its market-driven innovation model: rather than depending on state research institutes or tech giants, local firms like DeepSeek have succeeded by identifying unmet market needs and responding swiftly.
The west once had this system. Government sponsored grants to many students who showed promise. Strange and odd things were thought out and tested. Most not making any money although they did provide the basis for future experimentation.
Then Thatcher and Reagan came along and turned everything success had to make money. No scaffolding of ideas. Every study had to make money. Privatisation if the education system.
If you use your membererries to the times before the 80's arts and innovation was strong in the west.
Now everyone watches bloomberg and happy cat videos.
Listening, and caring seems to be two key elements in Hangzhou's success. Sweet!
"Unlike the government support in Silicon Valley, which sometimes prioritizes tech innovation at the expense of public living conditions, Hangzhou’s government sees quality of life as a critical strategy for attracting companies and talents."
"Hangzhou lacks at least four of these elements, with no clear advantages in venture capital, human capital, university-industry ties, or industrial structure"... Please, you should check on this. Have you heard about Zhejiang University, N3 of China and N1 in overall budget? Precisely, ZJU has developed a model of building specific ecosystems with the tech, medical, space, and other key industrial sectors. These ecosystems are linked to banks and massive donors (like Alibaba) that have developed huge incubators for start-ups like DeepSeek. Anyway, great piece, catching some of Hangzhou essence and incomparable charm.
Yes and no...China probably have 5+ universities who claim that they are the No.3 after Tsinghua and Peking, though ZJU is definitely a strong candidate. I think it is fair to say that ZJU has a good relationship and ecosystem, but Tsinghua or Shanghai Jiao Tong is probably better than this. And DeepSeek did not directly spinoff from ZJU like Zhipu from Tsinghua. So overall ZJU is great, but it is not Stanford.
The “waiter government” image stuck with me. The shift from enforcer to enabler feels like the real story here. Hangzhou didn’t outbuild, outfund, or outcredential Beijing and Shanghai. It just out-listened.
What’s most striking is how little of this story depends on traditional innovation metrics. No major VC surge. No elite university cluster. No military-industrial complex. Just a local government with enough humility to serve rather than steer, and founders bold enough to build without waiting for permission.
Can this kind of “low-ego governance” scale? Or does it only work in places that are still overlooked, where being the “only child” still feels possible?
Having gone through How Hefei City through the Anhui Provincial Government engineered not just finance BUT willing Industry to life i can say that what we will see in China is Cities together with their Provincial Governments to have an area of focus that gives them a global advantage, i mentioned this in the Hefei Financing paper, here. Hangzhou is finding their niche in SaaS as that's an area even though it isnt Govt priority area it gives them an edge. https://open.substack.com/pub/chinain5/p/the-death-of-risk-capital-how-hefeis?r=1c80q&selection=5187b180-2b69-462a-8f61-467b7f10d070&utm_campaign=post-share-selection&utm_medium=web&aspectRatio=instagram&textColor=%23ffffff
Isn't nannying companies exactly what the Singapore Economic Development Board does? But Hangzhou is more successful than Singapore, so presumably access to a large domestic market is an additional requirement for their model. Suzhou really missed an opportunity then.
I expect the great analysis and comparisons of how/why Hangzhou is in this position, but the personal story at the end and the pictures included really helped me get a sense of place. Really good work.
The U.S. has Silicon Valley, Seattle, and Austin. They all contribute different things to the American tech sector. The same can be said for China, which has Shenzhen, Hangzhou, and Shanghai. They’re all contributing to China’ economy thriving tech industry.
Overall good article on Hangzhou, but I believe this severely misses the mark:
"Unlike the government support in Silicon Valley, which sometimes prioritizes tech innovation at the expense of public living conditions, Hangzhou’s government sees quality of life as a critical strategy for attracting companies and talents."
Any time in the valley will impress upon you that local governance is borderline antagonistic to any successes of the money and developments the tech industry has brought them. There are historic vestiges of Cold War funding via Stanford and Cal for sure, but try and build so little as an apartment building in SF proper (or even a dorm for Berkeley students across the Bay) and see how far you get. Tech over the last 20 years there has succeeded in spite of local governance, not because of it (though Lurie at least seems to be moving in the right direction as of late)
Most of the tech elite in Silicon Valley want to turn it something closer to a Singapore on the bay, but are hamstrung by the landed gentry and historic interests which keep the world's #1 innovation hub looking more a glorified suburb
> As Qin Shuo 秦朔, a Chinese business thinker and former CEO of China Business News (CBN), notes, DeepSeek stands out for its market-driven innovation model: rather than depending on state research institutes or tech giants, local firms like DeepSeek have succeeded by identifying unmet market needs and responding swiftly.
this seems quite unreasonable.
The west once had this system. Government sponsored grants to many students who showed promise. Strange and odd things were thought out and tested. Most not making any money although they did provide the basis for future experimentation.
Then Thatcher and Reagan came along and turned everything success had to make money. No scaffolding of ideas. Every study had to make money. Privatisation if the education system.
If you use your membererries to the times before the 80's arts and innovation was strong in the west.
Now everyone watches bloomberg and happy cat videos.
nice information