BEIJING -- Watching people in Beijing get around or split the check after a meal, you might think China has left the rest of the world behind. Bike-sharing services are thriving and nobody bothers with a calculator any more -- a smartphone payment app sorts it out for you.
"China's urban landscape changes every three months," said Kenichi Kokubo, chairman of Hitachi (China), "because new businesses keep cropping up."
China has long been dominated by big state-owned companies, such as PetroChina and China Mobile. Sales at PetroChina have reached about $230 billion. With a market value of nearly $180 billion, it is one of the world's largest companies.
However, 60% of the country's economic output and 80% of jobs are generated by private companies.
Enterprises come and go at an astonishing pace. Last year alone, some 5.52 million businesses were started.
The startup ratio -- the number of new businesses created in a given year divided by the total number of companies -- was 21% last year. The figure dwarfs the roughly 5% seen in Japan and 10% in the U.S. over the past few years.
The ratio began rising from about 16% five years ago after the Communist Party, putting social stability first, encouraged starting businesses as a way of creating jobs.
Premier Li Keqiang proposed "mass entepreneurship and innovation" at the 2014 Summer Davos Forum in Tianjin. With help from the government to raise funds and set up offices, more than 600,000 university students started businesses in 2016.
In communist China, one might assume the economy would be under strict regulations. But new areas such as the sharing economy are relatively free of red tape and the "business environment is amazingly free," said a U.S. company executive and long-term resident. The rapid spread of bike-sharing services, for example, is partly explained by a lack of bicycle parking restrictions.
Founded in 1982, New Hope Group has developed into a food and agribusiness conglomerate. Chairman Liu Yonghao stressed that "China has become a hotbed for startups."
Liu said his focus is to develop young executives and continue to reform by taking advantage of internet technology. New Hope Group has recently partnered with a startup to start an online bank.
Although it has slowed, the Chinese economy is still expanding at 6-7% and business owners around the world are hoping to capitalize to boost corporate earnings.
According to data on direct investment, $3.8 billion flowed in from the U.S., up from the nearly $3 billion posted five years ago. Investment from the European Union was also up 50% to $9.6 billion.
Investment from Japan, on the other hand, more than halved to $3.1 billion over the same period.
One Chinese executive at a Japanese company said: "For many top people at Tokyo head office, positive news about China's economy may have become an inconvenient truth." If Japanese companies really want to use China as a growth engine, "they should come to China more often to see what is going on here."