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China may have a reputation for low wages and sprawling factories. But in a sign of changing times, one startup founder has embraced a strategy of paying top employees the highest salaries in the market — and so far it’s working.

Beijing ByteDance Technology Co. is the brainchild of entrepreneur Zhang Yiming. The company is best known for a mobile app called Jinri Toutiao, or Today’s Headlines, which aggregates news and videos from hundreds of media outlets. In five years, the app has become one of the most popular news services anywhere, with 120 million daily users.

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Toutiao is on pace to pull in about US$2.5 billion in revenue this year, largely from advertising. It was just valued at more than US$20 billion, according to a person familiar with the matter, roughly the same as Elon Musk’s SpaceX.

In China, the Beijing company is controversial because of its recruiting. ByteDance hires top performers from such giants as Baidu Inc. and Tencent Holdings Ltd., sometimes raising salaries 50 per cent and tossing in stock options.