China to optimize business environment

The State Council made arrangements to optimize the business environment to stimulate market vitality and social creativity, at an executive meeting Wednesday.

Premier Li Keqiang, who chaired the meeting, called for universal use of a negative list of sectors and businesses off limits to foreign investment to control market entry.

Optimizing business environment would help productivity and competitiveness, he said.

The business environment is the foundation for developing a modern economy and ensuring high-quality development, the premier said.

Greater efforts should be made in streamlining administration, compliance oversight and offering better services. An internationally competitive business environment would have equal treatment for domestic and foreign enterprises and stimulate market entities and social creativity,” he said.

China was ranked the 78th in ease of doing business, according to a 2017 report by the World Bank, up from the 96th place in 2013.

The government will cut red tapes, reduce taxes and slash fees for enterprises.

It was decided at the meeting that more efforts will be made to slash or cancel fees paid by enterprises, including operational and service fees and fees charged by sectoral associations and chambers of commerce. Costs for customs clearance will be lowered.

The government will further simply the procedures of administrative review and speed up approval procedures for business start-up, tax payments, application for construction permit and water, electricity and gas services, and real estate registration. The slashing of electricity price will also be a priority.

A new oversight mechanism characterized by integrity and information disclosure will be established at a faster pace. A unified punishment mechanism for breaches will be improved. An evaluation mechanism for business environment will be established, and rolled out nationwide over time. Special sectoral measures will be unveiled to facilitate the application for construction permits and cross-border trade.

“There is still much more that we can do to streamline administration, enhance compliance oversight and improve services. We should foster a more enabling business environment to incentivize a visible improvement in the ease of doing business for entrepreneurs, market entities and the general public,” Li said.

A series of measures have been taken by the current government to cut red tape, reduce corporate burdens and improve the business environment. It has canceled or delegated administrative approval by the State Council bodies on 697 items, which account for 45 percent of the total.

The government also shortened the list of intermediary services for administrative approval by 323 items, or 74 percent of the total, and canceled professional qualification and certification requirements for 434 items, more than 70 percent of the total.

China speeds up introduction of property tax


As part of the plan to contain housing price, China vows to step up housing system reform and create a long-term market mechanism.

When and how a property tax will be levied has long been a public concern.

China’s finance minister Xiao Jie has published his policy statement on People’s Daily, the Communist Party of China (CPC)’s flagship newspaper.

What have been specified?

Xiao outlined that property tax will be levied on industrial and commercial properties, as well as personal residential houses, based on their “appraised value”. He also suggested the legislation work would be completed by 2019, which would lay the foundation for its enforcement in as early as 2020.

Experts believe it has sent out signals for the speeding up of China’s introduction of property tax.

“The article shows that the authorities now have clearer thinking on the levy of property tax, as substantial questions have been specified, especially how the taxes will be collected,” said Yan Yuejin, senior researcher of the Shanghai-based E-house China R&D Institute.

Yan noted that “appraised value” means a comprehensive assessment of the original and current value of the property, while also taking into account affecting factors such as the real estate market situations and the price of similar property in surrounding areas. “It’s a rather fair and reasonable way to do it,” Yan added.

It would require the establishment of an appraising system by each city, according to Zhang Dawei, chief analyst of Beijing-based Centaline Property, a leading property agent company. In Xiao’s article, he also confirmed that local governments would obtain enough authorization in the process.

“That means local governments are allowed to run pilot policies based on their specific circumstances, so as to map out practical schemes that suit local development,” said Jiang Zhen, research fellow with Chinese Academy of Social Science, “and their experiences drawn from the pilot programs will become important reference for property tax legislation, which will be pressed ahead steadily.”

Why is property tax put on China’s legislation agenda?

“Housing is for people to live in, not for speculation,” this has been the tone-setting slogan for China’s real estate market since it was first brought up by Chinese president Xi Jinping on the Central Economic Work Conference in December 2016. The long-awaited property tax is a key measure to reduce the appeal of houses as speculative investment, and bring the development of China’s housing market to the right direction.

China’s property price has been rocketing for over a decade, partly due to Chinese investors’ preference for houses as investment and the resulting speculations. Bloomberg estimated that 25 percent of China’s housing demand is out of speculations.

At present, taxes are only levied when houses are bought or sold, which leaves multi home owners with no extra financial burdens. The planned introduction of property tax may not only deter future speculators, but also drive existing multi home owners to sell extra ones before the enforcement of the new tax, thus increasing housing supply in the market.

But it’s all up to the release of further details on how the property tax will be rolled out step by step.

‘Corporate service labs’ to support startups in first three months

Shanghai’s first “corporate service lab” has opened in a number of downtown districts to offer legal, financial and other support to local startup companies.

The service project, named “wehome LINK”, was initially established in two major Dobe innovative parks in Changning and Jing’an districts as the first batch of “service labs” to serve hundreds of locally based startup firms in a trial operation.

Under the scheme, service providers such as law firms, human resource management companies, insurance providers and incubators will offer services to the small and medium-size enterprises for three months. The parks’ operator will evaluate their performances and decide whether to retain or substitute them with better service providers.

This scheme will support a large swathe of startup companies under the government’s mass entrepreneurship campaign, especially during the bottleneck period that most local innovative firms are undergoing.

“We found many young entrepreneurs, though they do have achievements in their fields, can hardly figure out many problems during the management and operation of their startup companies, such as share allocation, legal disputes and financial issues,” said Jia Bo, chairman of Dobe Group, a major developer of local innovative parks.

“Some small and medium size companies don’t even know how to apply for government subsidies that they are entitled to, and lost the opportunity to further develop,” Jia said.

The first batch of seven service providers has entered the two innovative parks and begun serving startups on these issues. They include the Watson & Band law firm, online insurance company Qibao 360 and other service suppliers in print, office decoration, air purification and housekeeping.

Currently, most of the startup companies receive basic administrative services from incubators who merely help the entrepreneurs register their companies, pay taxes and apply for patents.

Most of the incubators neglected other more essential demands from startup companies, which hampered their development, according to mobile-Internet consultancy iiMedia Research.

Shanghai aims to be global cultural, creative center by 2035

Shanghai municipal government said Thursday it will develop the city into a cultural and creative center with international influence by 2035.

According to a newly-issued document, which introduced 50 promotional measures, the added value of the cultural and creative industry will account for about 15 percent of the city’s GDP in the next five years, and about 18 percent in 2030.

Shanghai Mayor Ying Yong said the cultural and creative industry is a pillar industry for Shanghai, and plays an important role in the city’s development and the people’s livelihood.

The document said Shanghai will become a global film and television production center, a performance capital in Asia, a global animation and game production base, a leader in domestic Internet culture and publication, an international creative design highland, and an international art trading center.

Google to open China AI center


Customers try the Google Daydream VR at a Google pop-up shop in the SoHo neighborhood in New York City. The shop lets people try out new Google products such as the Pixel phone, Google Home, and Daydream VR

Amid the enthusiasm shown by the government and domestic technology companies for research and development of artificial intelligence, global technology giant Google announced on Tuesday the opening of its AI center in China.

Li Feifei, chief scientist of AI and machine learning at Google Cloud, announced the launch of the AI center during the Google Developer Day in Shanghai. Based in Beijing, the center will host a group of researchers supported by hundreds of engineers in the country.

The China AI center is the first of its kind in Asia. It will join similar overseas centers operating in New York, Toronto, London and Zurich.

Li will lead the center, which will focus on basic AI research. She said this is one of the first steps for Google to conduct long-term research in China.

“There are a large number of scenarios where AI technology can be applied in China. The talents here are also top-class if put in an international context,” said Li.

Scott Beaumont, president of Google in China, expressed his confidence about the AI center, since he has witnessed the vibrancy of local developers and Chinese people’s willingness to embrace new technologies, which is hardly found elsewhere in the world.

According to global market consultancy Roland Berger, China now ranks second globally in the quantity of AI enterprises, patent applications, and the scale of financing across the world, only next to the United States. It is expected that AI technology will create 10 trillion yuan ($1.5 trillion) in profits for related industries by the end of 2030.

Finance, automotive, medical and retail will be the four industries in China seeing the most benefits by adopting AI technology, according to Roland Berger.

Leading Chinese technology companies such as Baidu Inc, Alibaba Group Holding Ltd and Tencent Holdings Ltd are making inroads into AI development in the form of self-driving cars, energy-efficient automobiles and educational equipment.

Simon Lance, managing director of global human resources company Hays in China, said that the AI sector faces a great shortage of candidates in China at the moment, since the country is “moving away from manufacturing and toward AI and robotics”.

It is calculated by domestic online recruitment platform Zhaopin.com that the demand for AI talents in China has doubled so far this year, with the biggest demand for algorithmic engineers.

Regarding the rise and prospects of the AI industry in the country, the central government released the first number of national-level open innovation platforms for AI in November. AI technology has been used at Customs and procuratorates to seek innovation in different scenarios. Such adoption at the government administration level will be extended in 2018.

Google to open AI center in Beijing

Global technology giant Google announced on Wednesday the opening of its artificial intelligence (AI) center in China during its second developers conference in Shanghai.

The new AI center will be based in Beijing. A small group of researchers supported by hundreds of Chinese engineers will be working there. Basic AI research will be the main area that the center will be focusing on.

Li Feifei, chief scientist of AI and machine learning at Google Cloud, will lead the research group of this new center. The center will seek cooperation with the local academia and other possible partners since China is one of the world leaders in AI technology development with ample supply of top talents in this area, she said.

“The center is a corporate-level effort. It is one of the first steps for Google to carry out long-term research in the Chinese market,” she said.

The preparation for this center started in January. A number of Google’s teams, such as the one for Tensor Flow – computation using data flow graphs for scalable machine learning, have taken part in the establishment of this center.

Water diversion project drives environmental improvements and provides new jobs for locals


Residents stroll through the streets of Ankang city, Shaanxi province.

Tuesday marks the third anniversary of the start of operations of the central route of the South-to-North Water Diversion Project, a massive infrastructure program designed to transport water from the south of the country to the arid northern regions via three separate channels.

So far, more than 10 billion cubic meters of water have been carried to North China via the central route, benefiting more than 53 million people.

The environmental improvements that have resulted from protection efforts in the regions that supply the water?the provinces of Henan, Hubei and Shaanxi?have attracted investment and brought new job opportunities in green industries, including tourism and ecological agriculture, benefiting people in the areas that supply the water.

Xia Qinghua is one of them. The 43-year-old was employed in a small toy factory in Shenzhen, Guangdong province, for 12 years before he returned to his home, Chenjiawan, a village in Hubei’s Shiyan city, in June.

He had long wanted to return, but was prevented by a shortage of jobs. However, the situation changed after Hubei Beidouxing Eco-agriculture and Forestry Co began investing in the area in 2014, lured by the cleaner environment.

“Great improvements have happened to the environment in my hometown. When I left at age 17, I had never seen an egret. Now, there are birds everywhere. They are beautiful,” he said.

Though he earned more than 5,000 yuan ($756) a month in Shenzhen, Xia often had to work until 11 pm.

“The salary was good, but I felt lonely and helpless because I had no family around me,” he said.

In 2011, he attempted to return to Chenjiawan, but the move wasn’t successful. “There weren’t many business opportunities in the poverty-stricken area at the time,” he said. Xia had spent 50,000 yuan on a small truck and started a transportation business, but he lost his investment and was 20,000 yuan in debt after a year, so he was forced to return to Shenzhen.

After that, he only returned home once a year, for the Spring Festival holiday, and leaving his family was always a tearful affair.

“I remember very clearly leaving home on the evening of the fifth day of the Lunar New Year in 2013. My wife, my daughter and I cried in each other’s arms. They all didn’t want me to go,” he recalled, tears glinting in his eyes.

Now, he works in the warehouse at a farm operated by Hubei Beidouxing, making about 2,000 yuan a month. Even though he earns less than he did in Shenzhen, Xia is much happier because he is close to his family and can care for his 70-year-old father, who is unwell. He supplements his income by leasing 0.5 hectares of farmland to Hubei Beidouxing, which brings in an extra 4,000 yuan a year.


The Danjiangkou Reservoir in Shiyan, Hubei province, is a source area for the South-to-North Water Diversion Project.

Li Wei, head of the farm, said the company rents 200 hectares of land from residents of three nearby villages, which have a combined population of about 5,000. While 500 villagers work on the farm full time, a further 2,000 are employed seasonally every year.

So far, the company has invested 280 million yuan in the farm, which has been in operation since 2014. However, the enterprise only became profitable this year; Hubei Beidouxing made more than 2 million yuan from the sale of fruits and flowers, and the farm attracts a steady flow of visitors who come to view the blossoms on the trees and pick fruit, he said.

The company has bought a number of vehicles to provide free transportation for sightseers. “The purpose of offering these services is not to make money. Instead, we hope to attract tourists and create business opportunities for people in local villages,” Li added.

Some local residents have also started providing services in their homes, such as restaurants and guest rooms. In response to the rise in the number of visitors, Xia plans to provide tourist services too.

The most recent data is not yet available, but the Office of the South-to-North Water Diversion Project said that between 2011 and 2015 the central government invested more than 17 billion yuan in environmental protection measures in the area that supplies the central route.

Beijing and Tianjin, two of the prime beneficiaries of the project, have also invested a combined 2.3 billion yuan in 650 projects, including a number designed to protect the environment and develop ecological industries, such as eco-agriculture and tourism. The municipalities have also mobilized local businesses to invest 88 billion yuan in 118 projects.


People stroll on a walking path near an embankment of Hanjiang River in Ankang, Shaanxi province.

Marketing opportunities

Last year, Chen Guosheng returned to his hometown of Shiquan county in Ankang city, Shaanxi, which is also located in the source area for the water diversion project.

The entrepreneur was prompted to return by the rise in the number of business opportunities resulting from the improvement to the local environment.

“The improvements have resulted in a lot of high-quality farm produce, but the local farmers don’t know how to market or sell the goods,” he said.

In response, Chen’s company, Shaanxi Baren Tourism and Culture Co, is building marketing channels, and has invested 20 million yuan to transform Zhongba, a small village, into a business hub.

His plan is that tourists will be able to visit for sightseeing and also learn how to make local delicacies, including tofu and cooking oil, using local farm produce and traditional facilities and methods. A trial has been in operation since Oct 1, while the village is being redeveloped.

Chen also rents 67 hectares of land, which he has turned into a tea plantation. The leaves grown on the plantation are highly rated by a tea merchant in Guangdong province, who has ordered a continuous supply.

Business opportunities are also being nurtured in Madeng township, Nanyang city, Henan, via a 1,667-hectare forestry project intended to restore desertified land in a mountainous area.

Two scenic spots are the township’s main tourist attractions, generating annual revenue of 35 million yuan. Now, the local government is using the forestry project, which has attracted investment of 82 million yuan, to widen the area’s appeal to visitors.

Cherry and Chinese cherry apple trees will be planted along roadsides to create attractive scenery, while pomegranates and walnuts will be cultivated to allow tourists to pick their own fruit, said Zhou Yushan, head of the Madeng government.

In 2009, the per capita income in the township was about 3,000 yuan, but this year the figure is double that thanks to the tourism boom. There are now more than 100 “farm resorts” in the township, according to Zhou.

“The environmental improvements are bringing more opportunities for the development of tourism. All nine registered impoverished villages in the township will be lifted out of poverty by the end of the year,” he said.

China increasingly attractive to foreign professionals

It took Nikita Ermakov, a second-year Russian student at Peking University’s Yenching Academy, four months of job hunting and many interviews before he finally got an offer from the HNA Group, a Chinese conglomerate on the Fortune 500 list. He is currently negotiating the offer with them, and hopefully, he will start the job after graduation.

Ermakov, 25, got his bachelor’s degree at a university in South Korea and a master’s in Russia before coming to China. He has three years of work experience from his time in South Korea and Russia and can speak four languages: English, Korean, Russian and Chinese.

“China has become the new U.S., a new land of opportunities,” he said. “The U.S. is a country of immigrants, but it is already a developed country. With President Trump’s new policies, the country has become stricter with visa and immigration regulations. China is still developing; it has a huge market.”

Ermakov is just one of many foreign talents who choose to come to China for career development.

According to the HSBC’s 2017 Expat Explorer Global Report in October, a move to China offers expats numerous career and income advantages.

The report showed that China, as one of the world’s economic powerhouses, now comes in second in HSBC’s global rankings for career progression. A total of 70 percent of the 27,500 expats surveyed said the Chinese mainland offers strong job prospects compared with only 54 percent globally and 48 percent in Eastern Asia, a 16 percent increase over last year’s figures.

Half of the surveyed expats on the Chinese mainland said they have more opportunities to acquire new skills here than at home, and they earn significantly more than the average expat – typically around $171,000 annually compared with $100,000 globally and $115,000 regionally, according to the report.

Wang Huiyao, founder and president of the Center for China and Globalization (CCG), said China is now involved in “global talent circulation.”

“There is a new trend in which more foreign talents will go to China to develop their career in the next decade or two. China’s international talent competitiveness is growing,” he said.

Hot areas for foreign professionals

According to the HSBC report, the top three employment sectors are the education, service, and financial services sectors, which account for 31, 17 and 9 percent of the employment market respectively. The service industry includes hospitality, travel and leisure, tourism and customer service.

Ermakov thinks that foreigners, especially recent graduates and young specialists, face fierce competition from Chinese professionals. But as the HSBC report showed, the education, services and finance industries require the highest level of qualifications, so foreign talents can still compete with domestic specialists.

“In spite of the fact that foreigners have lower language skills, lack connections and have a limited knowledge of the market, they have comparative advantages: international networking experience, mobility, knowledge of specific business cultures, foreign languages or business English, special areas of expertise and so on,” he said.

Eric Tarchoune, founder and managing director of the Dragonfly Group, an HR consulting firm in China, said foreigners who have competencies in big data, artificial intelligence, digital marketing, research and development, knowledge management, brand management, and smart data analysis are in greater demand. They have years of work experience and can bring innovative and different ways of working to their job in China, he explained.

Hays, a British recruitment company with offices in China, said the industries on the Chinese mainland that offer good job prospects for foreigners include science, technology, engineering and mathematics (STEM), the Internet, e-commerce and digital technology, and medical care in its December 5 release on the top 10 recruiting tendencies on the Chinese mainland in 2018.

“Candidates with well-developed soft skills and technical or product knowledge in their area of expertise are also in high demand for these roles and are well positioned to command the most attractive remuneration packages in the coming months,” said Simon Lance, managing director of Hays China.

Attracting high-end talent

National initiatives such as the Belt and Road initiative and national technology projects are attracting more high-end foreign professionals.

Jurriaan Meyer, a 52-year-old man from the Netherlands, recently resigned from his post as Asia Pacific director at an international software company in Beijing to work as the general manager of Shandong SRCC Rail Transit Technology, a new Jinan-based company that does innovative propulsion systems for both the local and international markets. Meyer has been in China for over 15 years.

“This project is part of the Belt and Road initiative and is supported by the governments of Shandong and the Netherlands,” said Meyer. “Jinan wants to build a local rail industry, and SRCC will be one of the first companies to contribute to this plan with local assembly facilities. If we succeed, this project could truly be the crown of my career in China.”

A new work permit system was implemented across China on April 1. Under the new system, foreigners fall into the categories of A, B or C based on their educational background, qualifications and work experience. The policy, which was launched by the State Administration of Foreign Experts Affairs, shows that China wants more high- and mid-level foreign talents.

According to Shanghai-based newspaper Jiefang Daily, Ben Feringa, the winner of the 2016 Nobel Prize in chemistry and Kurt Wüthrich, winner of the 2002 Nobel Prize in chemistry, are expected to obtain a Chinese green card in December.

Meyer also applied for a Chinese permanent residence card last year, which is expected to be granted to him in 2018.

“I think China is right to attract foreign talent while focusing on high quality,” said Meyer.

Meyer thinks that compared with big cities like Shanghai and Beijing, where the living costs are becoming excruciatingly expensive, second- and third-tier cities also offer a lot of opportunities these days.

“Facilities in China are very good these days. The transportation infrastructure is awesome, and the Chinese people and companies are usually very supportive and go to great lengths to accommodate foreign talent,” he said.

A new generation of expats

Madeleine, a 21-year-old woman from Indonesia, works as an event manager for jingjobs.com, a Beijing-based startup recruitment company.

She came to Beijing in 2013 and studied marketing for four years at the University of International Business and Economics (UIBE). She also does public relations for Global Foundation of Young Entrepreneurs (GFYE) at UIBE.

“Startup environments attract me a lot, as they are very challenging and give me the opportunity to learn every single day,” said Madeleine.

She started building her career here in 2016 by taking different internships and part-time jobs and has built her network from hundreds to thousands within a year.

Running events with NGOs and big job fairs, and meeting inspiring people are just some of her memorable experiences so far.

Madeleine thinks there is a bright future for bilingual professionals who speak Chinese and are passionate about China, its fast economic growth, growing advanced technology and diversity.

“Nowadays, employers and companies are hiring younger professionals because they’re known to be very tech savvy, entrepreneurial, adventurous and very talented overall,” she said.

Meyer agrees.

“I think a new generation of expats is coming who are younger and better prepared for China. Most speak Chinese, which is a great development,” said Meyer, who passed HSK 5.

He explained that the new generation of candidates compromises millennials, those who are born after 1990, and Generation X or those who are born after 2000. They are coming to China to study and then work. They learn Chinese at an early age and mix with the younger generation in China, he said.

“They are very well integrated into the culture and business environment and are of great value to China and their home countries,” he said.

“China is making a smart move by inviting many young people from abroad to study in China. This helps groom a pool of future ‘ambassadors for China’ who can help develop understanding and cooperation to the benefit of China and its counterparts abroad.”

How to grasp the opportunities?

Meyer finds that after coming to China to work, he has learned much more and is earning more as well.

He said that while China is developing fast and Chinese graduates and professionals are catching up quickly, some high-level foreign workers are still sought after for their unique combination of academic, professional and soft skills and language abilities.

“Soft skills and foreign languages are a weak spot for some Chinese candidates, particularly those outside of the big cities, so there are opportunities for those who can help bridge the gap between China and the world,” he said.

He thinks that to be successful in China, one needs many skills, such as in-depth experience in their related field of work.

He said recent graduates from abroad would have a hard time finding a job in China, as many graduates from China or Chinese returning from overseas are stiff competition.

Intercultural skills are also needed. Meyer said an excellent command of the Chinese language and an understanding of the business culture must be brought to the table. Flexibility and an innovative mind comprise the third and final essential factor.

“China will develop more and more, and the labor market will be even more competitive even for the most skilled talent from abroad. However, some very good ones will always be required and welcome if only to help China succeed on the world stage, away from the familiar home markets in China,” he said.

Nicolas Fusier, operations director of Dragonfly Group, said more and more Chinese companies that are going global recruit foreigners to develop in the North American and European markets. He said for these specific jobs, it’s definitely an advantage to be a foreigner because they know the culture and have their network.

However, Madeleine thinks that despite the good prospects, getting a work visa still poses a challenge.

“Be ready for the long process of applying for a work visa. It is sad because I have seen and met hundreds of young talent who did not get the work visa but are actually very enthusiastic and passionate,” she said.

Fusier sees things differently.

“It takes time to get a visa, but I think the most important thing when it comes to attracting high-quality foreign talent is to offer them interesting and innovating challenges while working here in China,” he said.

Graduates must adjust to new job market: expert

More than 8 million students will graduate from Chinese universities in 2018 and must adjust to lower-income opportunities amid intensifying competition, experts told the Global Times on Thursday.

The number of China’s university and college graduates is estimated to reach 8.2 million in 2018, the People’s Daily reported on Wednesday.

Students should be encouraged to seek jobs in grass-roots work units, the military, newly emerging fields and international organizations, Lin Huiqing, Vice Minister of Education, said at a meeting about the employment of university and college graduates on Wednesday in Beijing.

Lin said that the concept of innovation and starting up should be involved in education, the Beijing-based national newspaper reported.

Discrimination in any form, job hunting traps and pyramid schemes should be firmly opposed to protect college and university graduates’ legal rights, Lin said.

“China’s employment rate is actually among the highest in the world,” Xie Zuoxu, a professor of high education at Xiamen University told the Global Times on Thursday.

“We are not lacking positions. In fact, many grass-roots positions such as escort service, sales and teachers, urgently need to fill positions. It is a question of whether college and university students would like to take those jobs,” Xie said.

Young people should first increase their own capability to get the jobs they want. Newly graduated students needed to adjust their attitude especially toward grass-roots work, Xie believed.

The number of China’s college and university graduates has been increasing constantly since 2001. The number reached 7.95 million in 2017, 300,000 more than 2016, Xinhua News Agency said Thursday.

Co-working space sector set to boom


The flagship working space of co-working company WeWork in Shanghai at a renovated hundred-year-old UK-style building.

Freelancers and small and medium-sized companies that yearn for better working environments can increasingly avail themselves of a new option, co-working spaces.

With the rise of millennials in the workforce and the government’s supportive policies such as the so-called mass entrepreneurship innovation, the co-working space sector is booming, along with much of China’s emerging sharing economy.

According to an annual report released by the National Development and Reform Commission, more than 5.5 million new companies were registered last year, growing 24.5 percent year-on-year.

By the end of 2016, the country had nearly 26 million registered enterprises, up 18.8 percent year-on-year. And the report noted that 41.7 percent of the entrepreneurs are young people, especially millennials.

Seeing the huge potential in innovating away from traditional working offices, Hu Jing, the former executive vice-president of Chinese property developer Greenland Holding Group Co Ltd, established his co-working startup Distrii, to offer co-working spaces, coupled with online mobile office solutions.

“As more cities in China become highly developed and business concentrated, traffic congestion, air pollution and other city diseases pop up now, and the cost of commuting also has increased. All those problems are the real pain points for cities and will also reduce people’s work efficiency,” said Hu, now CEO of Distrii.

Hu aims to build a community that allows employees to set up workplaces in the nearest co-working offices, instead of traveling for hours to a far-away office.

“Advances in technologies will enable us to live in the flexible, mobile, productive and convenient working environment, marking a key point to the smarter future.

“Co-workers are able to deal with company tasks online via our mobile office solutions and communicate with other company employees in the working building to expand their social circles,” he said.

According to statistics on the official website, more than 450 companies have registered to use properties offered by the Shanghai-based co-working space operator.

Currently, Distrii has set up 15,000 working spaces in four cities, Beijing, Shanghai, Hangzhou, and Singapore. The company said it would unveil its flagship franchise in Singapore next April.

In September, the company announced it had raised 200 million yuan in series A financing to further expand its light-asset office network and start to tap into overseas markets in the Asia-Pacific, Southeast Asia and North America regions.

“Our co-working mode is more than simply renting working offices. We aim to connect people with the facilities via the internet, making them into part of the smart city plan,” Hu added.

Once users sign up to use the co-working building, they can simply use smartphones to unlock the office door and check in automatically via the internet. And the serviced offices will offer more functions, including tele-conferencing and video-conferencing.

“Currently, we especially target small and medium-sized companies, which account for around 70 percent of the total domestic firms, aiming to help them reduce the costs on operation and IT spending.”

A report released by consultancy iResearch showed that there is huge potential in China’s co-working industry. According to the report, the domestic market in China reached 4.29 billion yuan ($650 million) in 2016, and the number is expected to hit 9.35 billion yuan by 2019.

Feng Chao, an analyst at internet research company Analysys, noted that co-working companies need to offer favorable prices and comfortable working environments to accumulate enough users.

“The key is to introduce more value-added services,” Feng said. “It should be more than simply providing renting offices and should involve more needed services, such as training and a community network.”