The enormous market size, welcoming of innovative internet ideas, and growing globalization are factors that made China an attractive place for foreign startups to flourish. Here are five mainland Chinese cities that AllChinaTech think are the most suitable for foreign startups based on the conditions of venture capitals, internet company numbers, talents, and foreigners.

Beijing

Inno Way

Beijing is China’s largest metropolis. It is ranked ninth in the world in terms of venture capital (VC) investment, according to a report released in January by Martin Prosperity Institute, a Toronto based research institute and think tank.

Aside from VCs, the capital city has the most top ranking Chinese universities as well as foreigner residential communities.

There are so many startups in the capital city that it is called “the Silicon Valley of China”. During the peak time in 2014, as many as 50 new startups mushroomed everyday in Beijing.

Shanghai

Shanghai

Apart from Beijing, Shanghai is the only other Chinese city ranked in the top 20 metropolises by VC investment on the aforementioned report.

Although traditionally regarded as China’s financial center and not as active as Beijing in terms of internet startups, Shanghai is China’s second largest city after Beijing by internet company numbers.

The eastern Chinese city is second to Beijing in universities and foreigner residential communities.

Uber and WeWork are some of the many international internet companies that chose Shanghai to start their China operations.

Shenzhen

Shenzhen

Internet is in the DNA of Shenzhen. Various tech giants are located there including internet behemoth Tencent, China’s largest smartphone manufacturer Huawei, and world leading drone maker DJI.

As the youngest first-tier Chinese city and the country’s first special economic zone, Shenzhen encourages internet startups and has some favorable policies despite it having far less universities and talents than Beijing and Shanghai.

The southern Chinese city has a dynamic culture and it is inclusive to startup founders from China and other countries.

Hangzhou

Hangzhou

Hangzhou, home to China’s largest e-commerce company Alibaba, is arguably the country’s center for e-commerce startups. It is the fourth largest city by internet company numbers.

The successful initial public offering (IPO) of Alibaba has created some millionaires who later became angel investors and venture capitalists. Hangzhou has also one top ranking university to provide companies with talents, although there are not many famous ones in the picturesque city.

Moreover, the cost to rent an office and hire talents is lower in Hangzhou than in Beijing and Shanghai.

Guangzhou

Guangzhou

Guangzhou, Shenzhen’s twin city in southern China, has the fifth largest number of internet startups and is home to four out of the top 100 Chinese internet companies.

The first-tier city is attractive to foreign startups in terms of talents, technology and capital, as well as the old city’s down-to-earth and practical style. The city is overshadowed by Shenzhen to some extent, and it is keen to catch up in the internet era.

The city is home to headquarters of international companies such as Cisco, as well as phenomenal internet products including Tencent’s messaging app WeChat.

(All photos from Baidu Images)

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Heather Wang
Heather is a writer at ACT. She is passionate about literature, photography and technology. She graduated from Shanghai University of International Business and Economics with a Master's Degree. Write to her: heather[at]allchinatech.com