BUSINESS

Hangzhou Startup Subsidy Program Fuels Grey Market of Intermediaries

Published: Oct. 3, 2025 4:52 p.m. GMT+8

00:00

00:00/00:00

Listen to this article 1x

The policy provides grants of up to 500,000 yuan and subsidies for expenses such as office rental.

A government program in Hangzhou offering subsidies to young entrepreneurs has spawned a grey market of intermediaries profiting from information gaps and aggressive marketing, raising concerns about exploitation of public funds.

The policy, aimed at college graduates and university students starting businesses in the eastern tech hub, provides grants of up to 500,000 yuan ($70,168) for eligible projects, along with subsidies for office rental, social security contributions and loan guarantees.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.

Subscribe to both Caixin Global and The Wall Street Journal — for the price of one.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

Hangzhou’s government offers up to 500,000 yuan in subsidies for young entrepreneurs, sparking a grey market of agencies charging high fees to applicants.
Many entrepreneurs paid unnecessary commissions to intermediaries like Ruifu, despite rules prohibiting such involvement and allowing direct applications.
In 2024, a court ruled a service contract invalid, emphasizing that the subsidies are for public benefit and should not be exploited for private profit.

AI generated, for reference only

Who’s Who

Zhejiang Ruifu Enterprise Management Co. Ltd.: Zhejiang Ruifu Enterprise Management Co. Ltd. is a Chinese company that exploited a government subsidy program in Hangzhou. They charged high fees and commissions to young entrepreneurs for assistance with subsidy applications, despite applicants being able to apply directly for free. Ruifu also pressured clients into using their overpriced office rentals and accounting services, leading to legal disputes and concerns about the misuse of public funds.

Zhejiang Chuangwei Industrial Incubator Co. Ltd.: Zhejiang Chuangwei Industrial Incubator Co. Ltd. is a subsidiary of Zhejiang Ruifu Enterprise Management Co. Ltd. It runs a youth innovation park where entrepreneurs like Li Fei were persuaded to rent office space. Li Fei later found the rent was significantly higher than average and not fully covered by subsidies, suggesting potentially exploitative practices by the company.

AI generated, for reference only

What Happened When

August 2023：: Li Fei paid 6,880 yuan in tutoring fees and 20,300 yuan in commissions to Zhejiang Ruifu Enterprise Management Co. Ltd., which helped her secure 103,000 yuan in grants under the Hangzhou government subsidy program.

Late 2024：: Ruifu sued Zhou Ya after Zhou refused to pay a 20,000 yuan service fee upon learning the subsidy program restrictions. The court ruled the contract's high commission provisions invalid and unenforceable.

September 29, 2025：: When contacted by Caixin, Ruifu confirmed it charged fees for guiding applicants through the process but declined to answer questions about its commission charges.

AI generated, for reference only