The other example of flourishing economy is a city of Hangzhou. Within an hour by train (not necessarily by car) it has been dubbed the Silicon Valley of China. This is where the biggest Chinese Internet companies were founded and are now attracting young technical talent. The number of porsches and bentleys on the streets there reiterate the importance of the area to the entrepreneurship boom of modern China.
How Chinese customers satisfy these needs and interests greatly depends on the Chinese government which requires any foreign internet portal servicing Chinese audience to have physical servers inside china. Not everyone is happy to comply because this requirement means susceptibility to control and influence. Youtube, facebook, Twitter are notable services being blocked. And yet anyone hardly cares. For you see, these giants of online traffic have their counterparts in china. The language adaptation could probably explain partial success but would this be enough to overcome existing services which are slowly migrating to chinese localization? Perhaps we will never know.
The government plays another important role in the startup ecosystem. Whether it is directly or indirectly supporting young entrepreneurs, having government blessing is well... a blessing. A friendly government official with ties in your industry can get you far in exchange for 'dirty wine'. Being a foreigner in this strange land I hesitated to pry further but the picture was clear from so many different sources.
China is a unique place with its own idiosyncratic approach to running business and controlling economic growth. It is a place of many opportunities but not for everyone. It takes careful understanding of the forces shaping the economic climate in order to become a player. However, there is a way if there is a will.