30May Communism and capitalism merge in China – the sharing economy 0 0 BSI VC What do Mobikes, umbrellas, power phone banks and basketballs have in common – they are being rented out in China as the sharing economy is gaining traction in China. Is China going back to its roots? “That’s the essence of communism: communal sharing.” Is the sharing economy a natural merger of capitalism, communism and socialism? Mr. Xu set up Zhulegeqiu, which in Chinese is a pun that roughly means “Rent a Ball.” It lets users rent basketballs for 1 rm (15 c) from custom-designed automated lockers at basketball courts around the country. To rent a ball, users scan a code on the locker with their smartphone camera, unlocking a compartment holding a basketball. Mr. Shen, an entrepreneur, has raised capital for a shared umbrella service called Molisan, which means “Magic Umbrella,” charging 1rm (15 cents) to rent an umbrella for 12 hours from their kiosks at stations. Shanghai-based Duola, rents concrete mixers, mixer drivers and construction sites, are more niche and have analogues with similar rental businesses elsewhere. Portable phone-charging business, has enthused entrepreneurs and VCs – with plans to put portable-battery kiosks in malls and elsewhere. Laidian, Xiaodian, and Jiedian — raised more than $127 million in financing, according to itjuzi.com, a website that tracks investment in Chinese technology companies. How do these companies recover unreturned rentals – incessant phone calls! The Sharing enablers – how payments are made – Fintech Payment is made by Sesame Credit, the social credit scoring system developed by China’s Ant Financial, an affiliate of e-commerce giant Alibaba Group, that enables micro payments China’s cutting-edge, smartphone-based mobile payment systems also make sharing a snap. Run by Chinese internet giants like Tencent Holdings and an affiliate of Alibaba Group, the payment systems integrate seamlessly with a user’s bank account and allow even tiny transactions with simple taps and camera snaps. Where the money comes from Zhulegeqiu received around $1.4 million in venture investment from Modern Capital, a Shanghai-based venture capital firm. Venture capital firms in China invested $31 billion in 2016, up nearly one-fifth from the previous year, according to a recent KPMG report. Much of that has gone to sharing companies, as some big-money winners and a thriving start-up scene draw investors from home and abroad. “We’re seeing a lot of money bouncing around,” said Zhou Wei, chief executive of XNode, a start-up accelerator and co-working space in Shanghai, “and foolish investments being made.” The market for sharing in China China has conditions ripe for sharing A huge population, dense cities a sizable group of people who cannot afford to buy. The Chinese government sees promise in sharing. It estimates sharing last year accounted for $500 billion in transactions, and projected it would account for 10 percent of China’s economic output by 2020.