Where to Start an IT Company?

A friend of mine asked me where to start an IT company, Beijing or Shanghai?

I am thinking of going back to China to setup shop to develop business software. Between Beijing and Shanghai Which city is better city to do so in your mind? Some of factor I can think, such as cost of operation (cost of people, office, etc), IT infrastruture (connectity) and human resource (good programmers). Your opnion is greatly appreciated. Thanks again.

Beijing is the answer that hits my head immediately after I read it. Before I start explaining the reasons, please be aware that this is only my personal oppionion based on the limited information and experience I have. There is no simple yes-no answer to such a big question, since there are too many facters: the project you want to do , the market, even the whether, so everybody have different answers to this question.

Although I love to live in Shanghai, my answer to this specific question regarding environment of an IT company is still Beijing.

Market

Beijing is the place with almost all head quarters of government (I know the term of captial, I mean the head quarter of all its departments), and many nation-wide companies. People may argue that some multi-national companies are moving their Asia Pacific headquarters to Shanghai, Beijing is still most popularted area for head quarters. Think about China Telecom, China Mobile, SinoPEC, Petro China… The huge businiess bodies are all in Beijing. So do the IT venders like Microsoft, HP, IBM, Oracle, Cisco….

People and Cost

There are more universities in Beijing than in Shanghai. Many of my friends in IT industry moved to Beijing since there are more opportunities there. The average salary in IT sector seems to be higher than that in Shanghai. This may affect the choice.

Operation Cost

I have no clear idea about the office rental cost of the two cities. I guess in any city, there are expensive office like the Corperate Avenue near Xintiandi to some so-so place at around 5000 RMB per month. In Beijing, maybe there are more cheap places to choose from since it is so large and you don’t have to operate near the Tiananmen Square.

IT Infrustructure

The IT infurstratur of Shanghai and Beijing are very similiar, I think. They are ADSL, Cable Moderm, Dialup to T-1 connectivity in both city. So it is not a factor already. The IT infrustructure is very advanced in China in big cities since it all uses the latest technology with not much legency systems.

Social Network

This is the biggest difference. There are very good circles in China, with friends from all part of the industry to gather. People rely on personal relationship very much in Beijing to do business. The relationship is stronger in Beijing than in Shanghai.

As a result of all these factor, there are much more IT companies in Beijing than in Shanghai. There are many success story, like Lenovo, in Beijing but almost no such story in Shanghai. I cannot tell the who is the leader of IT industry in Shanghai. There are many companies, but none of them is as famous or successful than those in Beijing, even Hangzhou.

Again, Shanghai is still a charming city, although it may not be a green house for IT companies.

7 Comments

  1. Shanghai has his advantage in IC and Microchip industry not in IT,so the city’s environment is things of internet more than internet

  2. I agree with Jian Shuo’s viewpoint, Beijing is the best preference. Partly it depends on industry developing strategy shaped by goverment. Starter would lost initiative without good policy.

  3. Antipatterns

    An antipattern is a pattern that tells how to go from a problem to a bad solution. Listed below are links to some of my favorites….

  4. Totally wrong, the best place is Shenzhen.

  5. I don’t think Beijing is the best city for starting IT Comapny, Why Hong Kong is not considered in your mind? There are many skilful men in this field that has been started for very time already, although labor’s rate is going up higher than Beijing, but the time for traing workers can save you a lot of moeny for a long run. There won’t be too much troubles in the experience of working operation, etc….Why you have not considered HK?

  6. Ops. I didn’t put Hong Kong into consideration since I still didn’t get used to put Hong Kong in comparation with any mainland cities. Hong Kong and Mauco are SARs (Speicial Administration Regions) and they are so unique than other cities. If I put Hong Kong into the comparation, I may tend to think Hong Kong is a very good candidate to be the best but I know too little about Hong Kong so far, so it is safe not to put any comment.

  7. Beijing is not a good place to work. But is is a good city to live.

    Beijing lacks the infrastructure, such as office buildings, modern transportation, and most important: professionalism. The people in Beijing promises more than his ability. Shanghai people always promise what he can do. Usually, the job assigned to Shanghai people is well done. Beijing’s office supply is less than Shanghai, Beijing lacks good meeting place and good exhibition place. The GDP of Beijing is less than Shanghai. Beijing was paralyzed at least twice last year because of snow and rain. I experienced the events and think they are really not heavy. Shanghai has a better local goverment, better municipal infrastruture. No.1 infrastructure investment in recent several years. To start business in Shanghai is more easier.

    I got my conclusion with support from various sources, such as statistics report of the real estate agencies, my own experiences, etc. I worked in Beijing, Shanghai, Guangzhou, Shenzhen and Hong Kong. Beijing, along with Guangzhou are casual cities. While, Shanghai, Shenzhen and Hong Kong are busy cities. The weather in Beijing is not good, but the people is open and warm.

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