CHinaof leaderPresident Xi Jinping worries about “black swans” and “gray rhinos.” He has also recently begun to worry about the disappearance of unicorns. In May, he asked executives to explain why fewer Chinese startups are turning into “beasts” — private companies valued at more than $1 billion. In June, China’s cabinet, the State Council, acknowledged that the country is having cash flow problems because investors are afraid to pour money into risky new ventures.
Reviving China’s fading entrepreneurial spirit has become an urgent task. At the time of publication, the Communist Party Central Committee was meeting in Beijing to discuss reviving the economy. The new figures were presented during the meeting. GDP The gloomy mood comes as growth slowed to 4.7% year-on-year in the second quarter of 2024. More startup activity could boost growth and technological self-reliance, key goals of the party.
China has produced many unicorns in the past: Between 2016 and 2018, it produced at least as many as the United States and three times as many as the rest of the world. But this year, China will produce only half as many billion-dollar startups as the United States. The 2024 total will be less than one-third of the number in 2021, when China produced a record 109 unicorns (see Figure 1). A global slowdown in startup activity is just one reason.
