To those who are interested in startups in China:

I personally know some people who worked on start ups in China. From their experience, I see no hope for start ups without connection with government. I will show you some facts and some real examples here.

Here are some basic facts:

Chinese government controls Internet content tightly. Note that it is not the same level as NSA's surveillance. NSA's surveillance is bad. But it won't, or rarely, (directly) change/delete the content. The Chinese government, on the other hand, can even shut down a whole datacenter without telling the administrator with no reason --- By "no reason", I mean absolutely no explanation.

I had a blog and I know the service provider personally (It was a website hosting blogs like myspace). My blog was a high ranked one on their website. I posted some content discussing related to democracy/free speech in China and the whole website was down for a day. My friend received a call from network management department after they cut the network. They forced my friend to delete my blog entirely (the whole blog including posts for years.)

Chinese website was required to control any content on their website, otherwise, like the case I mentioned above, their website might be shutdown before telling you the reason. This is especially true for small startups.

Here is another example: during the early age of twitter (around 2008.), there were several startups in China trying to make a copycat of twitter in China. We call it micro-blogs and there are companies like hainei, jiwai, etc. working on twitter-like services. As we all know, content on such websites generated very fast. Much faster than traditional blogs. This makes the filtering work extremely hard --- those websites has to identify contents which are "politically incorrect" and delete them before any government officer found them (And yes, we DO have government employees who are dedicated to found those contents and report it to their higher authorities.) Such filtering work is impossible for a startup with tens of employees -- They used some filtering algorithms but people can always use other words to bypass the filter. Such micro-blogs (or twitter-like services) grows so fast with too much "unwanted" content, that finally, by mid-May 2009, they were all shut down by the government for half a year. Imagine a startup running without a live service for half a year, you know how hard it would be.

During this time, large companies with government connections like sina, tencent, 163, ect, prepared their own micro-blog services and finally put it on line. Such companies has large teams who dedicated themselves to filter content on their websites. Nowadays, the micro-blogs are only run by those large companies and none of the startups survived.

I told these stories to those who do not familiar with Chinese Internet Policy and intent to do some startups in China. My advise is: do not run a content-based startups, otherwise you can hardly afford the cost of filtering the users' contents.

EDIT 1: changed some spellings and expressions.