When leaders of the world's 20 biggest economies gather for their annual summits they will be in a city many people outside China will not have heard of, but which is one of the most prosperous, forward-thinking cities in the country.

And of those outside China who know of Hangzhou, capital of Zhejiang province, many may have heard of it in connection with one of the country's most go-ahead companies, Alibaba Group.

Hangzhou, with a population of 9 million, lacks the surrounding farmland that could provide it with food but is endowed with mountains, lakes and rivers that have helped it trade on its reputation as a tourist attraction.

Local people have always been painfully aware that if they could not grow it they were probably going to have to trade for it, so the ground has been fertile for the business ideas of entrepreneurs such as Alibaba's founder, Jack Ma.

It was in Hangzhou 17 years ago that Ma planted the seeds for the world's largest online retail empire, even as the broad avenues of Beijing hosted a large amount of China's mighty state-owned enterprises and as the skyscrapers of Shanghai hosted a plethora of big-name multinational companies.

Ma, a former English teacher, founded Alibaba in a modest apartment, starting out with 500,000 yuan (about $75,000 in today's terms) put together by 18 friends.

But those simple and humble beginnings seem to have taught Alibaba an invaluable lesson in sticking to the nuts and bolts of business, and it has become a dominant force in China's e-commerce industry. In the fiscal year ended March it served more than 400 million shoppers and sold more than 3 trillion yuan worth of goods.

Ma, 51, the executive chairman, said recently that he chose Hangzhou to locate the headquarters of the company not because he was born and bred there but because "our city" appreciates entrepreneurship by people who start with nothing and build up their enterprise.

Yao Jianrong, a professor at Zhejiang University of Finance and Economics, defines the economic development model in Zhejiang as "grassroots economy".

"Zhejiang doesn't have big state-owned enterprises. Its growth seldom depends on big foreign investment."

Rather than using big investment to spur growth in a top-down way, the small businesses set up by individuals drive economic development in the region via the bottom up model, Yao says.

Being based in Hangzhou helps Alibaba get closer to its customers, says Jin Jianhang, one of the company's 18 founders. Jin, now a president of Alibaba Group.

"The place is full of entrepreneurship, and people here are very open to try new things to improve life," says Jin, who like Ma is Hangzhou born and bred.

Apart from Alibaba's Ma, many self-made billionaires have built business empires in Zhejiang. They include beverages magnate Zong Qinghou of the soft drinks maker Wahaha and Lu Guanqiu, founder of the automotive parts maker Wanxiang Group.

mengjing@chinadaily.com.cn

(China Daily European Weekly 08/26/2016 page9)