Hangzhou's transformation into a tech powerhouse is driven by digital infrastructure, sustained government support, and a thriving startup ecosystem.
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| Hangzhou emerges as China’s top digital innovation hub, blending AI breakthroughs, startup growth, and strategic government support into a powerful tech ecosystem. Image: China Daily |
Hangzhou, China — July 16, 2025:
Hangzhou, once known for its serene West Lake and ancient heritage, has now firmly established itself as a global innovation hub, powered by cutting-edge digital infrastructure, proactive governance, and a thriving startup culture, reports China Daily.
The transformation is no accident. Canadian entrepreneur Nikk Mitchell, co-founder and CEO of virtual-reality startup FXG, first arrived in Hangzhou over a decade ago, planning to stay for just a year. Today, he leads his tech company from a studio in Dream Town — a government-backed incubator that has become synonymous with Hangzhou’s tech rise.
“China captured me,” Mitchell said. “The government support here makes it an incredibly business-friendly environment. It’s a place where ideas become real products.”
Mitchell is one of many entrepreneurs benefiting from Hangzhou’s unique innovation ecosystem — an environment that nurtures companies like AI startup DeepSeek, game developer Game Science, and robotics pioneer Unitree Robotics.
The foundation of Hangzhou’s tech boom traces back to 2003 when Xi Jinping, then secretary of the CPC Zhejiang Provincial Committee, launched the Digital Zhejiang initiative. Backed by a ¥62.5 billion ($8.7 billion) investment, the project overhauled internet infrastructure and laid the groundwork for smart governance and tech-driven growth.
“Faster networks and smarter government services changed more than just business — they reshaped the city,” said Gong Sen, director of Zhejiang University's Center for International Studies on Development and Governance.
This long-term thinking continued in 2006, when Xi called for Zhejiang to boost its scientific and technological innovation capacities. That vision now fuels Hangzhou’s edge in digital economy sectors like e-commerce, cloud computing, AI, and fintech — led by giants like Alibaba and NetEase, alongside an ever-growing community of startups.
For leaders like Cai Guoxiang, vice-president of AI eyewear company Rokid, Hangzhou's government has been crucial. “From the e-commerce revolution to the AI surge, it’s the consistency of policy support that built Hangzhou’s reputation,” Cai said.
He added that today’s startups are riding a second wave of innovation, centered around AI, blockchain, and smart tech — powered by a full-fledged industrial cluster and rapid administrative support.
“After meeting the criteria for a subsidy, we received 3 million yuan just eight minutes after applying online. That level of speed is unheard of,” said Cai.
In Yuhang district, where many startups are based, local authorities offer targeted support — including up to ¥600,000 in subsidies for high-tech enterprises and rent relief for graduate entrepreneurs. Administrative services are streamlined through digital platforms that respond within hours.
Lou Hangjie, deputy head of the science and tech bureau in Yuhang, emphasized that the policies apply equally to foreign and domestic firms. “The playing field is level,” he said.
Huang Kaisheng, dean of the Yangtze Delta Region Institute of Tsinghua University, noted that Hangzhou’s transformation is no accident, but rather the product of strategic design and bold reform.
“Hangzhou is now a frontrunner in the innovation race — a model for how tech, capital, policy, and talent can work together to shape a city’s future,” Huang said.
Beyond policy and infrastructure, personal relationships with local officials have kept entrepreneurs like Mitchell rooted in Hangzhou.
“When my company hit a rough patch, government officials treated me like a friend — not just an investor,” he said. “That’s why I don’t see our headquarters ever leaving this city.”
From visionary policy to personal connection, Hangzhou’s digital transformation is being written not just in code and capital, but in trust and intention. And as AI and smart technologies redefine the future, Hangzhou is not just keeping up — it’s leading the way.