By Jesse Ocean  |   25th January 18


China’s Influence on the Global Economy: Why are business incubators looking to China?

The world is embracing startups at faster rates than ever. However, one region is gaining a lot of attention due to their growing influence on incubators. China has immense economic growth, they’re the fastest growing economy and country in the world. But to understand why the startup world is taking so many trends from them, you need to know why they are being touted as a model to emulate:


A business has to keep its costs under control or risk going under. This is no secret. However, this is easier said than done in the West. With tech salaries at an all time high, and places like Silicon Valley being such an expensive location to maintain a corporate office, businesses are looking elsewhere. China is a place with cheaper labor, real estate, and products. This allows companies to compete without breaking the bank.

Speed of Manufacturing

When you have a physical product, you need your manufacturing turnaround times to be as fast as possible. A couple of weeks, or even days, delay can cause shortages and issues with storage and cash flow.

The Chinese are the best in the world at manufacturing. They don’t just do it well, they do it quickly. Finding a factory who can churn out product to time and budget is easier in China than anywhere else.


Not only is it easier to find factories that will make items quickly, you also have more options in China. In the West you might only have one or two companies to choose from, so your leverage is limited. However, in China you will often have 10 or more companies producing what you’re looking for.

Negotiating Potential

Some cultures have a set price for goods and that’s it but in China things are different. They live in a culture of negotiation. Everything from daily food to housing to business deals are highly negotiable. This allows deal makers and entrepreneurs to be flexible and creative when creating opportunities for their business. It’s not uncommon to find a business incubator that offers tips or workshops on negotiating.

Commerce Hub

When you launch a new business you don’t want to set up shop in a small place where business is not already booming. A city with a population of a few million is considered small in China so you can locate yourself in places with plenty of economic activity but without the disadvantages of starting up in one of the mega cities.


When you talk about growth, it’s hard to not to include China. Businesses are looking at China as a dynamic new business incubator, learning from locals about how they grow so quickly and what strategies will transfer to their own ventures both inside and outside China.

Middle Class

It used to be that the division of wealth in China was immense. You were either drowning in riches or a peasant on the street. Since the revolution and many years of industrialisation, this is no longer true. China has the fastest growing middle class in the world. This provides an excellent opportunity for companies to have beta testers and purchasers of their products before expanding into bigger markets.


China is changing the game when it comes to one of its recent innovations: WeChat. This social media platform boasts a combination of features that rival the likes of Snapchat and Facebook. Users can pay for groceries, share media, and chat directly in the app. In fact, it has almost 1 billion monthly active users. The most striking thing for companies to learn about this groundbreaking app is their ability to engage their users: the average person spends over 50 minutes in the app when using it.


There is no shortage of tech savvy talent in China. The Chinese are embracing technology at an all-time rate. They have technology in every aspect of their life. This goes from the trains, to the kiosks, to smartphones and their homes.

They are immersed in technology from a young age and the education system there actively promotes technical knowledge. A strong emphasis on math and technology is reinforced with testing and awards based on performance in these categories. The end result is a plethora of engineers, scientists, and accounting experts.

Proximity to Other Manufacturing Hubs

While China is certainly the main manufacturing hub in the world right now, there are other locations involved in this type of economic production. Namely, Taiwan, Vietnam and India.

This is great news for any startup that wants to get going in China, a short plane ride can take you to any of the three countries mentioned above. You can use these alternative manufacturing options to gain leverage when you are negotiating with Chinese suppliers. Make it clear that you are taking the occasional business trip to talk to other, possibly cheaper, suppliers and the Chinese won’t hesitate to match other offers.


Investors in places like Shanghai and Beijing are desperate to put their funds in something profitable and dynamic like a new startup. If you’ve ever looked up a list of the world’s billionaires, you’ll find a great number of them are from China.


A business incubator connects you to other like-minded individuals which will help you learn from each other and collaborate on new ideas. It can also connect you with investors and people who have experience in your field, you can receive funding and guidance in the same place. And in business, it’s always better to learn from someone else’s mistakes than to waste time and money repeating them on your own.

With the competitive nature of startup every entrepreneur has to be diligent. Those who are not will fall behind. However, if you use the resources available to you, you can grow your company faster and stand out from the crowd. A business incubator can be the secret weapon in your growth plan.

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