The New York Times reports on an AI coder gathering at Liangzhu in China, a virtual “coder village,” near the mega-metropolis of Hangzhou (population: 13 million). We see a picture of young Chinese people at a café and are told they are all coding. The Times says the scene resembles a Silicon Valley Starbucks, complete with strawberry Frappuccinos. Indeed, San Jose and its environs have more than their share of Asians, but that’s probably not what the Times meant.
What is important in the story, however, is that China has its sights on tech in general and on AI, specifically. We in the U.S. may rejoice at our tech lead, but if we look over our shoulder, we can see a most determined China trying to catch up.
And in some sectors, they already have. China’s electric vehicles (EVs) have silently passed right by, superior in technology, style, quantity and value.
The best EV in the world is one you’ll never buy by a company you’ve never heard of, reports the New York Times. The company is BYD (Build Your Dreams). BYD is a huge Chinese manufacturing company. One part of it makes EVs. With help from the Chinese government, the company has leaped into the lead. BYD’s EVs can charge up in 5 minutes. They have Level 4 autonomous vehicles (AVs), or point-to-point self-guidance, a concept that has proved elusive to American EVs. BVD had Level 4 AVs faster than Tesla had a reliable FSD (Full Self Driving Mode) for a price significantly less. Lucky for Tesla BYD is not allowed in the U.S.
The lack of a U.S. market has not prevented BYD from taking the lead. After all, the company has a huge domestic market and the rest of the world to sell into. BYD is now the best-selling EV brand in the world.
DeepSeek A Wake Up Call
China surprised the tech world with DeepSeek, AI built for a fraction of the price of our GPU-powered supercomputers. China has made AI a national initiative, putting the whole weight of the world’s 2nd biggest economy behind a technology that the U.S. leaves to chance, i.e., startups. The Wall Street Journal says China’s AI surge is the most serious challenge to the U.S. technology leadership yet. The article points out China is steadily eroding America’s once-uncontested lead in artificial intelligence, reshaping a cornerstone of modern technology.In addition to DeepSeek, Alibaba’s Qwen is rapidly deploying powerful language models and generative AI systems that. Qwen and DeepSeek may not consistently outperform the best American LLMs, but they are far cheaper, making them more accessible to businesses worldwide.
Chines AI makes strategic bets on the open-source movement which allows developers from Kenya to Kazakhstan to fine-tune Chinese AI systems without high licensing fees. As a result, Chinese models are gaining popularity rapidly even among industrialized nations. According to ChatGPT, banks like HSBC, oil companies such as Saudi Aramco, and numerous universities have adopted Chinese AI as economic alternatives to offerings from OpenAI and Anthropic. Even leading U.S. cloud platforms—Amazon Web Services, Microsoft Azure, and Google Cloud—are quietly hosting Chinese models, despite Washington’s escalating export restrictions and national security concerns.
Then, of course, there are the middle market and emerging economies, those that can’t afford U.S. AI pricing models. This has allowed the Chinese to carve out a share in regions where American AI providers have shown little interest.
China’s advantage clearly lies in its concerted national response. Compare that to the U.S. and the EU, where AI advances are hit or miss, and largely fragmented, made by startups who, if lucky enough to bring all attention to them, benefit from mind-bending investment. Then on the hardware side, there is NVIDIA, which needs no such investment, having more money than God.
Liangzhu: From Cultural Enclave to Coder Village
Nestled on the northwestern edge of Hangzhou, about 15 kilometers from the city’s dense urban core, Liangzhu has quietly transformed into one of China’s most unusual tech enclaves. Once best known as the namesake of the ancient Liangzhu civilization—a Neolithic culture revered for its sophisticated jade artifacts and early feats of hydraulic engineering—the area today blends history with modern ambition.
Liangzhu’s modern incarnation began in the early 2000s, when developers, led by Greentown China Holdings, envisioned a planned residential community that could offer an alternative to the crowded city. The result was the Liangzhu Cultural Village, a carefully choreographed neighborhood combining apartment blocks, villas, art venues, schools, and extensive green space. Over the next two decades, it grew steadily, eventually drawing tens of thousands of residents.
But it was Hangzhou’s emergence as a tech powerhouse—and a wave of state-backed incentives for startups—that gave Liangzhu a new identity. As entrepreneurs and software engineers sought a quieter environment with fast Internet and affordable living, the district became known as a “coder village,” where young founders and AI researchers gather in cafes, co-working spaces, and backyard pitch events far enough away from the madding crowd. Liangzhu may be a modern construct trying to blend romantic ancient heritage with cutting-edge tech, a contrast to Silicon Valley developers plugging away in SoMa lofts or San Jose coding dens.
Zhejiang University: The Talent Pipeline Feeding Liangzhu
Just as Stanford University has long been a cornerstone of Silicon Valley’s talent engine, Zhejiang University plays a comparable role in fueling Hangzhou’s—and by extension, Liangzhu’s—technology ecosystem.
Founded in 1897, Zhejiang University is consistently ranked among China’s top academic institutions, particularly for computer science, artificial intelligence, and engineering disciplines. Each year, it produces a steady stream of software engineers, data scientists, and AI researchers who find their way into the region’s fast-growing startups and tech giants alike.
Graduates frequently cite the university’s deep ties with industry as a critical advantage. Many of Liangzhu’s most promising ventures—including emerging AI firms and robotics startups—were founded or staffed by Zhejiang University alumni eager to build companies close to their alma mater. The proximity of the campus to Liangzhu, combined with the area’s appeal as a quieter, more affordable alternative to downtown Hangzhou, make it an all-too-appealing place to code, one that evokes ancient Chinese tradition while it pursues the West’s technology.
East Meets West: How China’s Startup Culture Differs from the U.S.
While China’s booming startup hubs may draw comparisons to Silicon Valley, we must point out the not-so-suble differences. Liangzhu has much government involvement, local values, and market dynamics that set it apart from its American counterpart
In the United States, venture capital and private investors have traditionally driven the rise of startups, with limited direct government involvement beyond grants or tax credits. In China, by contrast, national and provincial governments actively shape the innovation landscape through subsidies, incubation programs, and policy mandates. Initiatives like Hangzhou’s “Project Eagle” exemplify how the state helps identify strategic sectors—such as AI, robotics, and semiconductors—and allocate resources to accelerate their growth.
China, by investing in technologies that have proven effective, is able to avoid the hit-or-miss nature of U.S. startups, which suffer a crippling mortality rate. Knowing that AI has gained traction, China is emboldened to move quickly and invest heavily. Chinese startups often move faster to launch products and iterate, buoyed by enormous domestic markets and fewer regulatory roadblocks in the early stages. Founders are accustomed to aggressive timelines and a culture that prizes speed over perfection. In the U.S., while scale is also a priority, the pace can be tempered by stricter compliance requirements, a more litigious environment, and a stronger emphasis on user privacy.
American startup culture celebrates individualism and disruption—“move fast and break things,” but that is a celebration of its survivors. Over 90% of startups fail, a mortality rate that surpasses that of new restaurants.
Chinese founders can often take a more deliberate approach and a clear path forward. They can see what has worked and follow the formulae the West has supplied. It helps that they often have relationships with local officials, partners, and supply chains, which can be as crucial to success as technical innovation.
Taken together, China’s startup culture may be more state ambition than entrepreneurship and innovation. It may be more about copying and scaling rather than inventing.