Women lead more than half of tech startups in China

"In China, we don't really distinguish between female and male entrepreneurs. You’re just an entrepreneur"

“Women hold up half the sky” has been a common saying in China for the past 50 years, but for most of that time it hasn’t been the reality in business. China is changing fast, though, and in the past decade women have been holding up their half—and often much more—in big cities like Shenzhen and Shanghai.

Women own 30.9 percent of all businesses in China, according to the most recent Mastercard Index of Women Entrepreneurs. That puts it on par with neighboring Singapore (29.2 percent) and well ahead of Japan (17.6 percent).

In some Chinese industries the percentage of female founders is much higher. Among new technology startups, for example, 55 percent are being founded by women.

China also happens to be the only country where women outnumber men at WeWork. More than 51 percent of WeWork China’s members are women, compared with an average of 47 percent worldwide.

What makes all these numbers even more striking is the fact that in China, women make up only 45 percent of the total population.

What’s fueling the momentum? A mix of enthusiastic government support, robust startup communities, strong growth in small- and medium-sized businesses, access to educational opportunities, and the rapid growth of companies like WeWork that provide affordable office space has ushered in rapid advancements over the past decade.

“China is totally different from what people imagined five or 10 years ago,” says Anna Wong, cofounder of Female Entrepreneurs Worldwide, a Hong Kong-based organization that recently expanded to Shenzhen and Shanghai. “It’s evolving rapidly. Offices use facial recognition software for security and coffee shops accept WeChat pay. Society is changing, too. Female founders are very well-respected in China.”

An entrepreneurial era

Changes to women’s status in China started with the 1954 constitution, which granted women “equal rights with men in all areas of political, economic, cultural, social, and domestic life.” In the decades that followed, government reforms began to protect and empower women with national education requirements and anti-discrimination laws, including the Women’s Work Protection Regulations in 1988, Women’s Rights Protection Law in 1992, and the Labor Law in 1994.

By the 1980s and 1990s, more social programs—like the Association of Women Entrepreneurs in China, the All-China Women’s Federation, the Women’s Successful Career Program, and the Tianjin Women Entrepreneurs Centre—were born. Such programs offer a mix of career services, including subsidies for professional training, preferential tax treatment, loan programs, and mentoring.

More than 51 percent of WeWork China’s members are women, compared with an average of 47 percent worldwide.

As far as the most recent push to encourage entrepreneurship, most experts point to the country’s flagging economic growth. In a 2014 speech, Chinese Premier Li Keqiang called for “mass entrepreneurship and innovation” through more financial incentives for those starting businesses and stronger intellectual protections for innovators.

“In the past few years, the local governments have been competing with each other to build science parks and startup hubs, [enact] lower taxes, or even grant loans to attract people to start the businesses,” says Wong. “Government bodies encourage female leadership and entrepreneurship, so they can contribute to the GDP.”

Wong says that several smaller cities tried to convince her to relocate her business with promises of economic incentives.

“We were offered office space, loans, apartments for staff, and tax breaks in several cities just so we’d register the company there,” says Wong.  “These governments are always looking for good companies that contribute to and diversify their GDP.”

Cities like Beijing and Shanghai often aim to attract big tech companies, but also hope to boost cultural and creative capital by providing favorable tax policies for small businesses in creative industries—think film, design, animation, publishing, and more.

These incentives, combined with China’s development of the private sector, an influx of foreign capital over the past two decades, and higher levels of education across the nation, have created a framework where women founders can thrive alongside men.

Starting up in Shanghai

When China native Wen Yao relocated from Chicago to Shanghai earlier this year, she wasn’t sure what to expect. A WeWork Creator Awards finalist in Detroit, the serial entrepreneur has already started two businesses in Chicago and is now leading her third: Powwful, a female sportswear brand that aims to empower women of all shapes and sizes.

“When we expanded Powwful into China, we realized that we couldn’t just copy and paste what we were doing in Chicago,” says Yao, who worked as a marketing professional before starting her first business. “Everything works so differently in China—the social media platforms are different, the customer preferences are different, the behaviors are different…”

In Shanghai, women say that in business they “enjoy equal if not higher social status.”

But despite the learning curve, the Taiwan-born Yao has found herself at home in a like-minded community where women are highly regarded. “Out of all the cities in China, I feel like Shanghai is one of the best in terms of gender equality,” says Yao. “Our sportswear business is really about female empowerment, but what’s interesting is that when I met the China WeWork manager, he mentioned that women have higher status in Shanghai than in the U.S.”

Lucia Shen, founder of popular millennial-focused video site called DiX (loosely translated to “In the Moment”), agrees. “Every single city in China has its own unique culture, and you really can’t generalize,” says Shen. “But in Shanghai, specifically, women enjoy equal if not higher social status. We don’t really distinguish between female and male entrepreneurs. You’re just an entrepreneur.”

China’s own Silicon Valley

Maureen Mou, who runs luxury online fashion site Xiu.com, says it’s never been a better time to be doing business in China, particularly in the southeastern city of Shenzhen. WeWork will open its first location there later this year.

Today, Shenzhen is often compared to Silicon Valley, due to its emergence as a global tech and hardware manufacturing hub. With more liberal policies than the rest of China, Shenzhen has seen explosive economic growth, enjoying a year-over-year GDP growth rate of 9.1 percent from 2016 to 2017.

There are also myriad crowdfunding platforms, bank loan programs, incubators, competitions, and coworking spaces—all of which have been instrumental in creating China’s most entrepreneurial city. According to a study by the Global Entrepreneurship Monitor, 16 percent of adults in Shenzhen were engaged in early-stage entrepreneurial activities in 2016.

“We often benefit from experimental policies and there are countless opportunities coming to you,” says Mou. “But you have to be ready to embrace changes. If you are slow to adapt or to adjust to policy shifts, your business will be pushed out of the market because it’s so competitive.”

Anytime, anywhere

In China today, no matter where an entrepreneur settles in China, the possibility of starting a new business is at her fingertips.

“By using ecommerce platforms [like WeChat or Weidian], anyone can be an entrepreneur,” says Yao. “There are so many platforms in China. I think that provides a lot of opportunities for women to start their own businesses. There’s very little overhead and a low barrier to entry, so you see women really thriving in mobile e-commerce.”

Current government incentives for creative professionals have made video, blogging, and media a promising space. Many women have been able to create businesses in these fields.

“You have access to all the conveniences that you’d have in any metropolitan area, as well as tax breaks, incubators, and affordable ways to test out your idea or minimal viable products,” says Shen, whose video site has 700,000 followers. “You bootstrap here and test out ideas pretty easily.”

Shen says companies like WeWork have also made things easier for women entrepreneurs.

“You know, 15 years ago, if you wanted to have an office, you had to rent an entire office or just work from home,” says Shen. “There is no such thing as a garage in Shanghai, so you’d be in your living room with a small team and all your equipment. So I think having a place like WeWork has made the barrier to entry lower.”

There are still many obstacles facing women in China’s entrepreneurial framework, from social expectations to get married and start a family to securing investments from venture capital firms. Last year, for example, a high-profile investor in China stated that he doesn’t invest in female entrepreneurs. Yao says this perspective is not the norm.  

“As a woman founder in China, you’re not going to be an outlier,” says Yao. “Maybe a few years ago it would have been harder. But with the sheer number of women starting companies in China, it’s now normal and expected—and that has improved the big picture.”

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