In this article we examine the extent to which theoretical views of social embeddedness of economic development that were developed from the study of regional industrial networks continue to be relevant in cases of entrepreneurial networks that are formed in developing countries through the use of internet-based platforms and business services. We frame our research against the background of current libertarian discourse regarding the internet as an enabler of social networking which changes the institutional bearings of production and economic activity of modernity. We draw data from two cases of industrial networks of micro-entrepreneurs in China. Our research shows that although important relationships of the industrial network are virtual, conducted through the electronic tools and services, the networks are strongly socially embedded, sustained through close relationships with the corporation that provides the internet platform as well as the government