Paypal founder Peter Thiel: China must innovate or risk economic stagnation

The highly competitive nature of China’s start-up scene could limit the success of companies involved, according to venture capitalist and Paypal founder Peter Thiel.

In Hong Kong to promote his book Zero to One, Thiel put forward his theory that having a monopoly is the key to success for start-ups competing in the world's second-largest economy.

"The challenge that I see [in China] from my sort of monopoly perspective is there is a way that feels just hyper competitive," Thiel said at a book signing hosted by accelerator Brinc.

"People are incredibly good, they're incredibly fast at copying other people and there are also very, very many people they are competing with in every sort of dimension and that's the biggest challenge."

Forty-seven-year-old Thiel co-founded PayPal in 1998, and was an early investor in Facebook. He currently serves as president of hedge fund Clarium Capital and managing partner in venture capital firm Founders Fund, which has made investments in Spotify, Airbnb and SpaceX. Thiel also chairs Palantir, a data analysis firm that has been linked to US intelligence.

Forbes gives his net worth as US$2.2 billion.