8 reasons why China is the most fascinating tech market in the world

I lived in Beijing from 2004 to 2007. It was the first time I had ever set foot in China, and it turned out to be one of the most interesting experiences of my life. I witnessed firsthand China’s greatest economic growth period of the past 20 years, the engine powering all progress in China.

The below chart shows China’s annual GDP growth percentage since the late 1990s. From 2004 to 2007, China’s GDP growth rate increased consistently each year. The GDP growth peaked at an astounding 15 percent in 2007 (the last time the US had annual GDP growth over 15 percent was 40 years ago in 1978). China’s economy was simply on fire.

I moved back to the US at the end of 2007, feeling lucky to have been on the ground for China’s economic boom. But it turns out, my timing was wrong. China was just getting started.

Here are my eight observations on China’s tech economy that make it the most fascinating tech market in the world.

China has the largest middle class in the world

While China’s economy boomed, what was far more meaningful and interesting was the effect of this boom. Since 2007, China has more than tripled the size of its middle class (those that earn more than US$10,000 per year in disposable income).

The economic boom created the largest middle class in the world in China.

That matters because the growing Chinese middle class spent over US$260 billion overseas last year—more than any other nation. And yet, only 5 percent of its citizens have a passport.

Cross-border ecommerce is growing faster than domestic ecommerce

Because of the internet, this growing middle class doesn’t even need to travel to flex their spending power. Over the past five years, the growth of cross-border ecommerce grew faster than domestic ecommerce. It now accounts for 7 percent of overall ecommerce spend—that’s more than US$100 billion in annual revenue. The cross-border market is expected to exceed US$140 billion by 2021.

Even if overseas businesses don’t plan to have a presence in China, they should be thinking about the Chinese consumer.

Ecommerce goes to the real world

Big opportunities in small cities

There’s an entire new internet inside WeChat

To BAT or not to BAT

China is skipping past the rest of the world in payments and AI

The golden age of Chinese startups is upon us