NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, January 22, 2014

Crowdfunding, which allows web users to contribute small sums of money to fund collective projects like concerts and films, is taking off in China — and just how far it will go is more than a business question. By allowing netizens to vote with their renminbi, online crowdfunding could become an economic activity with political effects, bringing closer two separate spheres that rarely overlap in China. As a result, in the future, crowdfunding platforms could do more than make music; they may also help bring political changes to the country.

There’s no question crowdfunding is becoming a big commercial factor in China. Websites like DemoHour and Musikid already allow Chinese citizens to hold real-world events that might once have been economically unfeasible. These sites aren’t just for indie concerts — they also allow users to find projects that excite them and fund anything from refurbishing a Tibetan hostel, to producing an avant-garde film about gay life in Beijing, to developing a portable air-quality measuring device, with perks for donors if the project hits its goal. The Wall Street Journal reported on Jan. 6 that crowdfunding is “gradually catching on” there, while an October 2013 World Bank report predicts that the Chinese market could grow as large as $50 billion by 2025.