China Power

China’s Thriving Bike-Sharing Economy

A Chinese bike-sharing startup raises $600 million and enters Global Market.

China’s Thriving Bike-Sharing Economy
Credit: Flickr/John Pasden

In China today, the bike-sharing economy is booming. If you happen to walk around in some first or second tier city in China, you’d find that the sidewalks of streets are filled with yellow or orange or green or rainbow-colored bicycles, and one or several pedestrians are scanning the bicycles with their smart phones. Then within seconds, the pedestrian would drive the bicycle away.

If you think the Chinese bike-sharing scheme is nothing special, you’re missing something. It’s true that many cities have their own bike-sharing systems, but what’s special about Chinese bike-sharing scheme, as Helen Pidd, an editor of the Guardian, summarized, is three points:

1) “You can leave them anywhere”– other people could locate it through GPS system;

2) “They are cheap”–a single trip cost less than $0.5 for every 30 minutes;

3) “They aren’t a massive drain on public funds”– Chinese bike-sharing scheme is completely managed by the private sector. It liberates the government from providing this public goods and saves unnecessary public funding.

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Thus, it’s no big wonder that by March, Chinese multiple bike-sharing startups have brought more than 2 million new bikes for sharing to its city streets in one year, according to Financial Times.

Recently, in June, one of the Chinese most successful bike-sharing startups, Mobike, successfully raised another round of $600 million financing, breaking the record in bike-sharing sector. The co-founder of Mobike revealed that the fund would be used to spur Mobike’s internationalization strategy. By the end of 2017, Mobike aims to expand its service to 200 cities worldwide. Actually in March, Mobike already landed in Singapore, and soon, another China’s bike-sharing startup, Ofo, landed in Singapore, too.

On June 13, Mobike entered the British market and delivered the first batch of 1000 bikes to Manchester and its neighboring town Salford. In the view of Helen Pidd, Mobike is “better than London’s ‘Boris bikes’.”

The bike-sharing economy is only a small part of the broader sharing economy that is thriving in China. The sharing economy’s first small but successful step of “going abroad” has inspired the Chinese media’s vision for Chinese sharing economy. Some Chinese entrepreneurs have even said China’s sharing economy would soon lead the world. On July 17, Xinhua, the Chinese national news agency, published an editorial, claiming that China’s effect of innovation has spread to the world.

In fact, the Chinese media may be on to something. Bloomberg also believes that China is the future of the sharing economy.

Again and again, the Chinese people have shown that they do not lack the innovation or the entrepreneurship.  The real problem always affecting entrepreneurs is the government’s over-regulation and policy uncertainty.

Recently, Chinese Premier Li Keqiang repeatedly emphasized that “The government’s supervision on new things should be inclusive and prudent, rather than ‘nipping in the bud.’” You don’t have to read too much between the lines to get that subtle warning.

Charlotte Gao holds a MA degree in Asian Studies. Her research interests center around East Asian topics. She has worked in the past as a news editor, reporter, and writer for multiple traditional, online, and new media outlets.