ZHEJIANG IS THE most entrepreneurial place in China. Fan Li, celebrated as the ancestor of all Chinese merchants, worked there some 2,500 years ago.
In modern times, too, it has produced private-sector titans. Li Shufu, the boss of Geely, a carmaker, acquired Sweden's Volvo. Lu Guanqiu, Wanxiang's chairman, controls the world's top independent car-parts firm. Zong Qinghou, founder of Wahaha, went from street hawker to drinks magnate, and the family of Ren Zhengfei, the founder of Huawei, came from there.
Since the province lacks natural resources and good farmland, locals have always had to use their ingenuity to scratch a living.
Entrepreneurs were once seen as oddballs, and failure was considered shameful. Neil Shen of Sequoia Capital, an American venture-capital fund, thinks China has reached a cultural inflection point. Li Keqiang, the prime minister, has been trying to encourage people to take risks and start companies.
Locals used to worship American firms and tried to copy them. Sceptics derided their efforts as "copy to China" (C2C). Kai-fu Lee of Innovation Works, a technology incubator in Zhongguancun, Beijing's answer to Silicon Valley, retorts that Western firms copy too. He insists that local Chinese firms are as good as Apple at integrating technologies and finding market opportunities.
Chinese consumers' rising expectations and intensifying competition in consumer-facing industries are already pushing firms towards more innovation. One example is WeChat, a popular social-media and payments platform run by Tencent.
Money is flooding into startups, and there is talk of a tech bubble. Venture-capital investment in China reached a record $15.5 billion in 2014, more than triple the previous year's level. These internet giants have spent billions on swallowing startups in areas from video streaming to online travel to big data.
Mr Lee predicts that eventually there will be more billion-dollar startups in China than in America, though Silicon Valley will have more firms of higher value. It is easier in China than elsewhere to achieve scale quickly because the local market is both enormous and fairly homogeneous.
The biggest opportunities are provided by the Chinese economy's egregious inefficiency, a legacy of decades of state capitalism. "China has more old-economy, non-transparent and unreasonably profitable firms than does America…the streets are just paved with gold for disrupters," says Mr Lee.