Many business leaders on the ground in China describe three “different Chinas,” with Tier 1 cities like Beijing like visiting the old China, Shanghai the current China, and Shenzhen the future China. While foreign companies looking to gain access to the Chinese market typically look to Beijing or Shanghai, the Greater Bay Area, led by Shenzhen, has grown rapidly from a swampland to a leader in Chinese tech innovation, and has become a premier technology and manufacturing hub.
The Chinese Greater Bay Area consists of the mega cities in Southern China’s Pearl River Delta region including Guangzhou, Shenzhen, Zhuhai, Foshan, Dongguan, Zhongshan, Jiangmen, Huizhou, Zhaoqing, Hong Kong and Macau. In total, the population is more than 70 million, produces 37% of the country’s exports, and 12% of its GDP. The Greater Bay Area represents an ambitious plan to compete with Silicon Valley by pooling talent, financial, infrastructure, and technological economies of scale to build the first true global competitor.
Tech Innovation in Hong Kong
Hong Kong has long been a global finance hub and still retains world class financial infrastructure and talent pool. The majority of Western banks and many companies still view Hong Kong as the first step along a path to China exploration and, ultimately, expansion. China has in recent years increasingly exerted its political will on Hong Kong in an attempt to integrate Hong Kong with China ahead of the planned 2047 unification date. The Hong Kong banking and trade sector provides a stable economy of professional support services for the Greater Bay Area to compete globally.
Shenzhen Shakes Up Chinese Tech Innovation
Shenzhen has emerged as the premier Chinese tech innovation hub in large part due to the massive workforce and resources in large MNCs such as Tencent, Huawei, Foxconn and ZTE. Tencent, the company behind WeChat, employs over 40,000 staff and is the heartbeat of Chinese techn innovation. The company was ranked fifth-highest global brand value and has spun off a generation of technology literate entrepreneurs.
Mobile phone manufacturer Huawei is the world’s second-largest mobile phone company behind Samsung (and ahead of Apple). Huawei engineers are on the bleeding edge of developing the world’s first 5G network, ahead of its Western competitors. Huawei’s influence in emerging markets such as Southeast Asia and Africa plays a large role in creating economic ties to growing regions.
Tech in the Chinese Greater Bay Area
The Chinese Greater Bay Area has traditionally been a global manufacturing hub led by the Foxconn plants that support many global supply chains and companies such as Apple, Sony, Dell, and Blackberry. This manufacturing base has developed into global leadership in manufacturing technologies. This hardware expertise is now developing into market leadership in Internet of Things (IoT) technology.
China, led by companies innovating in the Greater Bay Area, is widely considered to be a close second to Silicon Valley in the development of artificial intelligence. The Chinese government has set key initiatives to make China to premier leader in AI by 2030. While privacy concerns remain a question at the forefront, the scale of data available and being utilized by technology companies in concurrence with government officials creates a perfect storm for industry leadership.
Want to Take Advantage of Growing Chinese Tech Innovation? Expand with an Experienced Partner.
Between the Greater Bay Area, growing population centers, and islands completely dedicated to tech innovation, there’s no shortage of opportunities to pursue in China—but how do you get there?
Velocity Global has assisted hundreds of organizations with Chinese expansion, and into over 185 countries around the world. Whether you’re still weighing the best city or region for expansion, or you’re searching for that final piece of the expansion puzzle to complete your strategy, our International PEO (Professional Employer Organization) solution can help you break into the Chinese market on your terms and timeline—no entity needed.
Want to learn more about International PEO and how our expansion experts can help establish your presence in China in as few as 48 hours? Let’s chat.
