Equity Strategy: Innovating the Future - China's Technological Trajectory (Part 1)
Expect a narrowing of the price-performance gap between Chinese and US technology stocks
Chief Investment Office17 Mar 2025
  • Chinese enterprises are increasingly present in major technological sectors
  • China’s technology and platform industries have demonstrated resilience despite trade tariffs
  • Population migration is driving the rise of new upper tier-2 cities
  • Investors’ lightweight positioning in China equities and its technology stocks to reverse
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Chinese companies are making their presence felt on the global technological stage. These enterprises are present in nearly every major technological sector − from language models and cloud platforms, to semiconductor hardware and electric vehicles – as China commits to digital innovation, disruption, enablement, and adaptation.

While China's tech industry has faced challenges such as global trade tariffs and technological barriers, it has nonetheless demonstrated remarkable resilience. This dynamic growth indicates that the global tech landscape is evolving, with Chinese companies playing an increasingly influential role. Additionally, in some other sectors, Chinese enterprises even hold an undisputed leadership position, such as in the fields of drones, robotics, EV and batteries.

China’s new little giants: SRDI (Specialised, Refined, Distinctive, Innovative). The development of China's technology industry is also inseparable from the support of its cities. A prime example is the recent rise of the "Six Little Dragons" of Hangzhou —technology companies spanning various sectors that are becoming the city's new hallmark — comprising names such as Unitree, DeepSeek, Game Science, Manycore, BrainCo, and Deep Robotics.

In line with the flourishing of new technology enterprises, these cities are continuously attracting top-tier talent from across the country. As a result, there is a dramatic rise in demand for advanced infrastructure, from modern transportation to stylish residential complexes and schools, all of which contribute to the urban landscape. Meanwhile, the influx of skilled, high-income workers further stimulates domestic demand in these cities. A byproduct is the booming of high-end retail, fine dining, and demand for a diverse array of cultural experiences, injecting powerful momentum into the local economy for sustained and quality growth.


Figure 1: Number of SRDI little-giants across Chinese cities

Source: Nancai Zhiku, DBS



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