A start-up incubator on the outskirts of Shanghai is laying out sweeteners for budding entrepreneurs: free office space, subsidized housing, tax breaks and in some cases cash of up to 200,000 yuan (US$31,800).
The main condition? Be from Taiwan.
The center, formally called the Jinshan Cross Strait Youth Entrepreneurship Base, is part of the new face of China’s approach toward Taiwan.
More than 50 such bases have sprung up over the past three years across the country, attracting scores of Taiwanese start-ups and their young founders.
For China, young Taiwanese are seen as a key demographic to win over, but Taiwan’s government is viewing the success of the incubators and other programs with concern.
For years, Beijing’s policies toward Taiwan have focused on improving ties with traditional businesses, which still continue.
However, analysts and the Taiwanese government say that the Sunflower movement protests in 2014 over a trade pact with China caught Beijing’s attention.
“Before 2015, the Chinese mainland government targeted mainly commercial or business interests in Taiwan, but after the Sunflower movement, they shifted their focus to winning the hearts of the younger people, because they see them as the future and they see them as the biggest destructive force,” said Zhang Zhexin (張哲馨), a research fellow on Taiwan issues at the Shanghai Institute for International Studies.
There are at least 53 incubators across China, including in cities such as Deyang in Sichuan Province and Shenyang in the nation’s northeastern rust belt, according to a list on China’s Taiwan Affairs Office Web site.
The Jinshan Cross-Strait Youth Entrepreneurship Base is in an office block in the heart of a sprawling industrial zone. It is styled like a Silicon Valley start-up, with brightly colored walls, rows of vacant computer desks and posters describing companies working there.
“We want to be a window to young Taiwanese to help them understand the mainland,” said Dong Ji, deputy Chinese Communist Party committee secretary of the industrial zone, which spent about 5 million yuan to set up the center in 2015.
Although the centers are open to Chinese and foreign companies, they offer the most financial incentives to those from Taiwan, he said.
The facility outside Shanghai is host to 165 projects, 40 of which are Taiwanese. It aims to increase this number to 100 by next year.
The Jinshan government — which also sees the incubator as an opportunity to bring young talent into the industrial zone — finances the start-ups itself and has given companies 30,000 yuan to 200,000 yuan in cash support, he said, adding that some have also received other support worth 500,000 yuan, such as subsidies and tax breaks.
No conditions are placed on companies interested in registering at the incubator, he added.
“We are working hard for the cross-strait relationship and Taiwanese youth who come here to start businesses to create a better environment for them to live and be entrepreneurs,” he said.
Such efforts in China come as Taiwan is seeing talented workers leave the country amid stagnant wages and economic growth that has lagged behind that of its neighbors. Workers in the tech industry — its strongest sector — are also being lured to China by higher pay.
Taiwanese Andy Yang, 27, was one of those who went abroad. He in 2015 moved to Shanghai to set up an education technology company, Bridge+, with four partners.
“I looked at some opportunities in Taiwan, but felt that the difference between the two markets was very big,” he said. “Our mainland compatriots are also very curious about Taiwanese people and have in terms of government policies given us many opportunities, so I came.”
For virtual reality company Vactor Digital chief executive Wu Chung-hsin, the Jinshan center has not only sponsored him, but has given him business. It has commissioned his company to outfit a 40m2 virtual reality exhibition center that is to showcase the area’s tourist attractions.
“I would not be able to get these sorts of conditions in Taiwan. I asked, but in reality I was advised that what I could get was not as good,” he said.
Other policies also focus on young Taiwanese. In July last year, the Chinese Ministry of Education published a directive on its Web site asking its universities to relax entrance requirements for Taiwanese students.
These efforts by China have not gone unnoticed in Taiwan.
Taiwan Solidarity Union publicity department deputy director Chen Chia-lin (陳嘉霖) in September last year wrote in an editorial in the Taipei Times that the start-up incubators aimed to “pull the rug from under the government’s feet.”
The government of President Tsai Ing-wen (蔡英文) sees mixed messages in China’s offers to young Taiwanese.
“As different government agencies in China might have different and sometimes inconsistent strategies toward Taiwan, we are closely watching the development of Beijing’s Taiwan policy,” said a Taiwanese official who declined to be named.
The Mainland Affairs Council warned of the risks and challenges of seeking opportunities in China.
“Taiwan is a free, democratic, pluralistic and open society. There are very big differences in the political, economic, societal and systemic aspects between the two sides,” it said in a statement.
Overall, it is unclear whether China’s policies are having a broad effect on Taiwanese attitudes.
The government has been trying to grow support for its young companies through moves such as earmarking US$3.3 billion for a start-up fund in September last year.
Daniel, a Taiwanese who last year registered his biotechnology start-up in Shanghai, said he launched his business in China because of the market opportunity, but was wary of accepting help from cross-strait incubators.
“You can be reduced to becoming a political tool,” he said, declining to give his full name because of cross-strait sensitivities. “If you take their benefits, there may be some sort of conditions later. You may lack some sort of freedom, or they may ask something of you.”
Others, like 33-year-old Chiu Yi-chen, who last year expanded her nail foil sticker business, Miss Behua, to China and is receiving support from the Jinshan incubator, said Taiwanese entrepreneurs like her must be practical.
“On the political situation, the ordinary people still have to make a living. I also tend to say that I’m focused on my own personal life; let’s leave political matters” for others to worry about, she said.
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