One year after the so-called "DeepSeek shock." Chinese tech startups are rapidly increasing their presence in the hottest areas of global industry, including artificial intelligence (AI), electric vehicles, and robots. Observers say growth has become denser as a massive domestic market that can achieve rapid commercialization of technology works in tandem with the government's policy of fostering strategic industries and localizing technology, along with an investment ecosystem that separates the wheat from the chaff even during downturns.
Zhou Luohong (周洛宏), a strategic partner at Xinding Capital (鑫鼎资本) and an angel investment expert in China, cited "China's uniquely massive market size" as Chinese founders' competitive edge in a written interview with ChosunBiz. Zhou also emphasized that Western technology sanctions and protectionism toward China are paradoxically giving startups "growth opportunities that did not exist before." That is because the Chinese government is stepping in to push for technology localization to reduce dependence on overseas supply chains, giving opportunities to domestic corporations. Zhou added, "The state's proactive stance on early-stage science and technology investment is also having a positive impact on startup growth."
Zhou is an investment expert who began angel investing in 2009 and leads Tianshi Bairenhui (天使百人会), a private equity (PE) investment institution in Beijing. At Xinding Capital, he manages two angel funds and one pre-IPO fund. He also serves as a startup mentor at numerous universities and incubators, including Tsinghua University, Peking University, the University of Chinese Academy of Sciences, and Qidi Star (启迪之星). He was selected as one of the "top 10 investors in China." Xinding Capital, where he works, is an investment firm based in Beijing that discovered Contemporary Amperex Technology (CATL·宁德时代), Xpeng Motors, and Horizon Robotics (地平线).
◇ "Invest in people… use downturns as opportunities for contrarian bets"
Zhou put "people" at the forefront as the standard for assessing investment value. He said, "Invest in smart people with unique technological strength, invest in people of good character, and invest in people with big dreams." He added that a founder's persistence and ability to learn and adapt determine the survival and growth of corporations.
Citing Ningbo-based advanced coating materials corporation Yuntu Tech (云涂科技) as an example, he said, "This corporation was started by the founder with five juniors at the materials lab of Xi'an Jiaotong University. By improving its products and business model in a timely manner, it has grown into a corporation with the world's first 100-ton-class, fully dry, automated, integrated production line." He explained that Yuntu Tech's rapid growth was driven by the founder's precise judgment about how and when to improve products and the business model.
Zhou assessed that China's slowdown phase—including a slump in domestic demand and a decline in investment—is instead a time to unearth high-quality startups. The more the downturn, the more clearly a founder's capability and technological competitiveness stand out, he said. "I consider 'contrarian investing' important," he said, explaining, "The worse the economy, the easier it is to find good projects. The tougher the market environment, the more corporations without technological strength and competitiveness are naturally weeded out."
As a representative case, Zhou cited Shenzhen-based 3D vision and sensing company Dianyun Technology (点昀技术). Although the corporation was founded in 2021, when the startup environment was tough amid the spread of the COVID-19 pandemic, it has now secured world-leading capabilities in low-latency visual processing technology. It has completed two funding rounds in total and is currently conducting a third round.
◇ "The market is king, and customers are the decision-makers"
Zhou cited the world's largest market size as the strongest "backing" for Chinese startups. He stressed that corporations can grow only by respecting the market and customers. For example, amid rising safety concerns over flush door handles on electric cars, China recently became the first in the world to ban flush door handles on electric vehicles. "China's market regulators are increasingly valuing the market and consumers," Zhou said. "The market is king, and customers are the decision-makers. Corporations that respect customers and prioritize user experience will take the market."
On the potential for cooperation between Korea and China in innovation, he said, "Korea is China's neighbor, and both countries have strengths in subsectors of hard tech such as semiconductors and batteries, so there is complementarity." He cited cooperation between SK hynix and Advanced Micro-Fabrication Equipment Inc. (AMEC), and between EYEQLab and Tianyu Semiconductor (天域) in China.
Zhou said, "Both governments value innovation and the growth of young talent," adding, "If leading corporations in batteries and semiconductors—such as LG, Samsung, CATL, and BYD—were to open parts of their new product development or engineering processes to young Korean and Chinese scientists and founders in the form of competitions, the joint development of technologies in both countries and industrial cooperation would deepen, and consumers around the world would benefit."