China does not fit many people's mental image of a "start-up nation". Even the most patriotic of Chinese would privately acknowledge there is an uncomfortable degree of truth in these impressions. However, this situation is changing.
Back in 1997 the Beijing government made a strategic decision to promote large firms. "Grasp the big and let the small go” was the slogan. Yet recently China's leaders have started to talk about the virtues of the small. Last month, Prime Minister Li Keqiang visited Beijing's Zhongguancun, a hub of technology and internet firms in the city’s Haidian district often referred to as "China’s Silicon Valley”. “Entrepreneurship is not a privilege of a small number of people but the choice of many".
The Beijing government has also introduced some tax breaks for emerging industries such as e-commerce. Small firms already pay a lower corporate income tax rate. There is also a burgeoning finance infrastructure of angel investors, meaning that budding entrepreneurs do not need to waste time trying to extract loans from the country’s conservative state banks.
Some argue that the education system is improving, too. Where once Chinese lecture rooms were factories full of rote-learning students, some universities now offer courses in entrepreneurship. Students are also encouraged by the more progressive-minded professors to take part in entrepreneurship competitions.
Houde has put seed funds directly into universities. "Only three years ago no one believed in student start-ups," says Houde's founding partner Steve Zhu. "[Now] we believe the future belongs to the young generation."Mr Zhu also thinks the ambitions of Chinese young people are evolving, encouraging more risk-taking. Whereas once many would have aspired to a secure and well-paid job at a foreign company, now they see large potential rewards from setting up on their own. "The environment is getting more attractive to graduates," he says. “It’s risky – but you can hear successful stories everywhere."
What about concerns about intellectual property protection? Mr Zhou says the fact many new Chinese firms have international expansion ambitions is actually helping curb piracy. "IP protection is very important for Chinese entrepreneurs, because if they want to list outside China they have to follow the rules," he says.
China's economy slowed, Beijing is encouraging the development of the hi-tech and high value-added economy. They also hope that entrepreneurship will help create employment for graduates. There is no doubt that the Chinese economy needs entrepreneurs.