China’s startup frenzy has gripped the country in a big way. Startup incubators are popping up almost everywhere in the Middle Kingdom.

China established its first ever technology incubator back in 1987, but the market didn’t explode until 2005 when the authorities decided to weigh in. The number of domestic incubators surged from around 500 in 2005 to over 2,000 in 2015, and the figure is expected to near 5,000 by 2020, a report from research institute iiMedia shows.

Of course, there are many good reasons for the incubation boom. At the policy level, Beijing launched a series of moves to encourage startup innovation and entrepreneurship. In addition to a slew of preferential policies, the country’s state VC coffers held over US $336.4 billion earmarked for startup investment by the end of 2015.

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