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Beijing Slips in Global Start-up Ecosystem Ranking Amid US-China Tech War

Beijing slides three places to eighth in the global start-up ecosystem ranking. The weak domestic economy and tensions with the United States hinder investment in Beijing. Singapore emerges as Asia's top city, followed by Seoul and Tokyo.

This reduction can be ascribed to a sluggish local economy and rising tensions with Washington, which have discouraged investment in the city.

Silicon Valley grabbed the top spot in the rankings, with New York and London tied for second. However, the most remarkable feat in this year's rating was Singapore's climb to seventh place, making it the highest-ranked Asian city. Seoul and Tokyo followed closely behind in ninth and tenth position, respectively.

The GSER research examines start-up centres using five criteria: finance, performance, market reach, talent and experience, and knowledge. While Beijing obtained good marks in the last four categories, it ranked last among the top ten cities in terms of funding.

Beijing, which achieved its highest overall position of third place in 2019, had hurdles due to a drop in investment deals and successful exits. According to the research, in the 30 months leading up to the end of 2023, Beijing registered 223 Series A agreements, ranking 11th globally, but just 60 exits, placing it 58th.

The Chinese government's years-long crackdown on the technology sector has had a substantial impact on diverting investment away from the country's consumer internet sector. This area was once a hotbed for unicorns, or start-ups worth more than $1 billion. According to industry experts, the intensifying rivalry between the world's two largest economies has lowered investor sentiment even more.

According to a March 2018 blog post by investment firm Preqin, certain US-based limited partners, particularly pension funds, have cut their capital allocations in China. This drop can be linked to the United States' limits on access to finance, talent, and technology. Ben Harburg, founder and managing partner of MSA Capital, also stated that the US regulations had hampered Chinese investment.

According to KPMG, venture capital investments in China fell by 30% in the first quarter of this year compared to the previous quarter, reaching their lowest level in four years.

Despite these problems, Beijing continues to dominate Asian cities in terms of ecosystem value. The GSER report reveals that the value of exits and start-up valuations from the second half of 2021 to the end of 2023 places Beijing at an impressive $525 billion. This figure is nearly five times that of Singapore and ten times that of Tokyo. During this period, Beijing had 16 exits, each worth at least $1 billion, making it the second-highest globally, just behind Silicon Valley.

  • Beijing falls three places to secure the 8th position in the global start-up ecosystem ranking.

  • Weak domestic economy and tensions with the US deter investment interest in Beijing.

  • Singapore emerges as the top-ranking Asian city, followed by Seoul and Tokyo.

Source: SCMP

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