Opinion | Chinese tech companies should focus on conquering the world from Shenzhen, as hostility increases abroad

The stunning arrest of Huawei executive Meng Wanzhou sends the latest signal that Chinese hi-tech exports and investments face increasingly hostile terrain abroad. China’s technology sector is being singled out or contained, in part due to populist pressures in key Western markets.

Given the current standstill, a crucial opportunity emerges for Chinese technology to forge a new growth path, particularly from the Greater Bay Area technology cluster, with Shenzhen and Hong Kong at its epicentre. Huawei has been a crown jewel of Chinese technology in Shenzhen and a symbol of how far China has come in its 40 years of reform and opening up. But what the Huawei case shows is that success is fragile and China has a long way to go, as the global race for technological supremacy heats up.

A key challenge for the Greater Bay Area, already the most international technology cluster in China, is positioning itself to pull ahead of global competitors, including Silicon Valley in the San Francisco Bay Area. To do so, it must focus not only on catching up, but also on leapfrogging. It should learn from the challenges technology clusters around the world face and strive for higher-quality growth. These challenges include an increasing divide in talent and income, asset price and living cost inflation, environmental degradation, and the stifling of competition and entrepreneurs as incumbent players crowd out smaller players.

Second, a technology centre like Shenzhen has seen property prices skyrocket, which is not a new problem, as similar trends have been observed in parts of Silicon Valley. But housing cost inflation not only diminishes the affordability of a technology cluster for new talent who want to work there, it also widens inequality among existing residents.