Fast-forward to the present: While China’s real estate market awaits stronger signs of a turnaround, the nation’s tech prowess can no longer be ignored. In 2025, foreign holdings of Chinese assets across all classes — equities, bonds, deposits and loans — recorded inflows in the first half of the year that were roughly 60% higher than the total for all of 2024. China, and Chinese tech in particular, is now firmly back on the radar of global capital. The shift marks a clear return of confidence, fuelled by Beijing’s push to reopen its markets and the re-emergence of Chinese tech as a global disruptor.
But who, what and where exactly is China’s tech sector?
China’s tech ‘jungle’
The incumbent tech titans Baidu, Alibaba and Tencent — collectively known as the “BATs” — defined the first era of China’s internet economy. This informal grouping, occasionally stylised as “BATX” to include consumer tech giant Xiaomi, built much of China’s digital backbone across search (Baidu), e-commerce (Alibaba) and social media (Tencent). Yet even within this once-stable hierarchy, the balance of power keeps shifting. Of the original trio, Baidu has been steadily eclipsed by latecomer ByteDance, whose Douyin (or, for the international audience, TikTok) platform has upended the old internet order and now commands a far greater cultural and commercial clout in defining China’s domestic digital landscape.
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More recently, growing attention has turned to Hangzhou’s “Six Little Dragons”. Of the six, two have gained international acclaim in recent years. DeepSeek, in particular, captured global attention with the release of its R1 open-source AI model in January, which upended Silicon Valley assumptions on how quickly and cheaply China stands to close the AI gap. Meanwhile, within gaming circles, Game Science’s Black Myth: Wukong that was released last year is widely celebrated as China’s first home-grown AAA video game. Rounding up the list, BrainCo, Deep Robotics, ManyCore Tech and Unitree Robotics are all active across the AI sector, working on technologies ranging from humanoid robotics to neural (brain-computer) interface systems.
Then there are the four “AI tigers”: Baichuan, Moonshot AI, Z.ai (all Beijing-based) and Shanghai’s MiniMax, all domestic AI unicorns and rising leaders in China’s large language model (LLM) space. Their rise signals a clear pivot from the previous generation of Chinese AI start-ups, which focused mainly on computer vision and image recognition. This cohort was led by SenseTime, Megvii, CloudWalk Technology and YITU. According to the Artificial Analysis LLM Performance Leaderboard, Moonshot AI, Z.ai and MiniMax all rank among the top 15 open-source models based on intelligence scores.
Innovation cities
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It is no coincidence that certain cities dominate when discussing rising players and China’s tech leaders. The truth is that geography matters when trying to make sense of the country’s technology scene. Specific regions have developed distinct specialisations across the AI value chain, with Beijing, Shanghai and the Guangdong-Hong Kong-Macao Greater Bay Area emerging as the primary centres of innovation. Among these hubs, Beijing, Shanghai and Shenzhen stand out for their city-level expertise across different layers in the AI stack.
Beijing leads in LLM and algorithmic research, benefiting from its proximity to elite institutions such as Tsinghua University and Peking University, as well as its broader network of universities and research centres. As of 2025, Beijing-based companies lead the nation in AI models, accounting for nearly 40% of all LLM releases in China. Zhongguancun, the city’s tech-focused industrial park, is often referred to as China’s Silicon Valley.
Shanghai, by contrast, has emerged as the country’s most advanced biotech and semiconductor hub. Anchored by China’s leading foundries SMIC and Hua Hong, and supported by a dense web of suppliers and global names like ASML, Lam Research and Applied Materials, the city represents China’s most complete and mature semiconductor ecosystem. In the first half of 2025, the city alone attracted 19% of total semiconductor investments, the highest share for any single city.
In recent years, the broader Yangtze River Delta region, which extends beyond Shanghai to include cities such as Hefei, Hangzhou and Wuxi, has also risen to prominence for its growing contribution to China’s semiconductor value chain and other domain-specific niches within national “chokepoint technologies”.
Hefei, for example, is known as China’s “Voice Valley” for its leadership in speech and natural language processing (NLP) technologies. As a whole, the Yangtze River Delta ranks among the country’s top unicorn clusters. In 2024, the region contributed about one-third of national R&D investment, underscoring its strategic importance to China’s innovation drive.
Meanwhile, Shenzhen drives the AI application layer of China’s tech sector, anchored by giants such as Huawei and Tencent. The city’s robust industrial base also hosts major manufacturers like leading EV manufacturer BYD and Luxshare Precision (a key electronics supplier for Apple, among other international brands). This concentration of manufacturing expertise has made Shenzhen a natural leader in hardware and robotics, and home to firms such as UBTECH (humanoid robots) and RoboSense (LiDAR), which are driving commercial deployment at scale.
Mapping the terrain
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China’s geographic distribution in AI development is no accident. Under the State Council’s top-level Artificial Intelligence Development Plan (AIDP), issued in 2017 with the goal of making China a global leader in AI by 2030, the Ministry of Science and Technology (MOST) designated a network of AI pilot zones. Selected cities received tailored incentives and funding, and were encouraged to specialise in areas aligned with their existing industrial strengths in a bid to accelerate the commercialisation and deployment of AI. For example: Beijing, its research and academic base; and Shenzhen, its manufacturing and industrial DNA.
The key point is that while China’s tech sector has only recently regained the attention of foreign investors, its scope and spatial logic reflect years of deliberate and centralised planning. There is a keen logic underpinning the country’s technological rise, one that is often lost or oversimplified in Western coverage that tends to frame China’s advances as either dystopian or derivative.
To better map this evolving landscape, we have compiled a list of companies distilled from multiple AI and tech indices tracking China. Specifically, this includes the FactSet China Robotics and AI Index, FTSE China’s IT constituents, China International Capital Corp’s (CICC) 5G and Semiconductor Leaders Index, and the Hang Seng Tech Index.
The final list presented in Table 1 omits companies trading under restricted tickers (which are inaccessible to foreign retail investors) and those with lower growth prospects, in order to provide a clearer picture of where accessible, high-growth opportunities lie. What remains clear is the diversity of China’s tech champions and likely future disruptors who are active across a wide spectrum of sectors and end markets — from fintech to robotaxis.
As mentioned, companies listed on the ChiNext and STAR Boards (Shenzhen and Shanghai’s Nasdaq-equivalent markets) have been excluded due to restrictions on foreign retail ownership. Both boards were established to channel capital towards “strategic emerging industries”, a cornerstone of China’s broader push for technological self-sufficiency and industrial leadership. Priority sectors, as outlined in the State Council’s Made in China 2025 blueprint for industrial transformation a decade ago, include next-gen infotech, robotics and new energy. AI and the semiconductor value chain sit squarely within this national mandate. Hence, unsurprisingly, a significant share of China’s most critical tech firms are concentrated on these boards. Table 2 outlines exchange-traded fund (ETF) options that offer exposure to these otherwise restricted segments.
Looking ahead
The sheer breadth and dynamism of China’s tech sector continue to defy easy categorisation. Within this fast-evolving ecosystem lies a network of companies that warrant closer and more nuanced examination than a single snapshot can provide. Our continuing effort to map China’s innovation landscape has proven as educational as it is eye-opening. What is clear is that investors willing to look beyond the noise will find a vast and underappreciated landscape of innovation.
Take Naura Technology, one of the companies we have examined in recent weeks. Naura is China’s largest semiconductor equipment manufacturer. In 2024, the company ranked sixth globally by sales, behind familiar names such as ASML, Applied Materials, Lam Research, Tokyo Electron and KLA, the only Chinese name to break the top 10. Domestically, Naura primarily serves the dry etching, cleaning and deposition segments of the chip fabrication and advanced packaging processes (see Chart 1 for an overview). In April this year, the company expanded its already-broad portfolio with the launch of its Sirius MC 313 machine, entering the adjacent ion implantation equipment market.
Naura’s rise mirrors broader national efforts: In recent years, China has moved aggressively to indigenise its semiconductor industry and build a self-sufficient domestic value chain amid rising geopolitical tensions and restrictive trade policies. That said, while the narrative is compelling, the risks are equally pronounced. Chinese semiconductor stocks have rallied sharply in recent months. Cambricon Technologies (excluded from the table above as the company trades on a restricted ticker), which is often dubbed China’s answer to Nvidia, now trades at a forward price-earnings ratio (PER) in the 300s.
Naura, by contrast, trades at a less-demanding forward PER of just under 40. But the bigger danger, however, is one that we raised in last week’s article. China’s next transformative phase is not merely about “catching up” with Western breakthroughs but leapfrogging them through alternative technological pathways. Accordingly, companies like Naura, while strategically positioned within the existing technological framework established by the West, may not necessarily stand at the forefront of China’s next technological leap.
In chipmaking: Alongside efforts to master laser-produced plasma extreme ultraviolet (LPP EUV) lithography technology in which ASML currently holds a global monopoly, Chinese researchers are pursuing alternative paths, including Harbin Institute of Technology’s work on laser-induced discharge-produced plasma (LDP) EUV and Tsinghua University’s experimental steady-state micro-bunching (SSMB) approach. In August this year, Prinano (or PuLin Technology) unveiled China’s first nanoimprint lithography machine that sidesteps EUV methods altogether for semiconductor production.
The alphabet soup of acronyms aside, the bottom line is clear: China’s innovation frontier is evolving on its own terms, and faster than many realise. Tomorrow’s winners may well emerge from entirely different technological bets. In the months ahead, we intend to stay on this learning curve — mapping the contours of China’s rapidly shifting technology frontier and spotlighting the next wave of companies driving the advances in both China’s, and the world’s, technology landscape.
The Malaysian Portfolio gained 0.7% for the week ended Oct 29, bolstered by price recovery for Southern Cable Group (+8.7%) following its recent sell-off. LPI Capital (+0.6%) and Maybank (+0.1%) also ended in positive territory while United Plantations (-0.6%), Kim Loong Resources (-0.4%) and Hong Leong Industries (-0.1%) were the three losing stocks. Total portfolio returns now stand at 184.9% since inception. This portfolio is outperforming the benchmark FBM KLCI, which is down 11.9% over the same period, by a long, long way.
Meanwhile, the Absolute Returns Portfolio gained 1.9%, lifting total portfolio returns to 43.1% since inception. The top three gainers were CrowdStrike (+9.1%), Alibaba (+5.7%) and Goldman Sachs (+5.2%) while SPDR Gold MiniShares Trust (-3.8%), Berkshire Hathaway (-3.3%) and ChinaAMC Biotech ETF (-0.7%) were the losers last week. The AI Portfolio was up 3% on the back of strong gains for Marvell Technology (+11.2%), Horizon Robotics (+7%) and Amazon (+5.7%). ServiceNow (-2.6%) and Intuit (-2.2%) were the two losing stocks. Total portfolio returns now stand at 6.9% since inception.
Disclaimer: This is a personal portfolio for information purposes only and does not constitute a recommendation or solicitation or expression of views to influence readers to buy/sell stocks, including the particular stocks mentioned herein. It does not take into account an individual investor’s particular financial situation, investment objectives, investment horizon, risk profile and/or risk preference. Our shareholders, directors and employees may have positions in or may be materially interested in any of the stocks. We may also have or have had dealings with or may provide or have provided content services to the companies mentioned in the reports.
