South China Morning Post
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Huawei has been at the forefront of the tech tussle between China and the US. Photo: AFP
Opinion
Editorial
by SCMP Editorial
Editorial
by SCMP Editorial

China benefits from tech moves in crisis

  • Adversities – from the pandemic to US antagonism – may prove to be blessings in disguise with the convergence of capital and technology
SCMP Editorial
SCMP Editorial
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If every crisis presents an opportunity, then China recently has had two big breaks. According to the latest China Internet Report released by the South China Morning Post, the dominant social trend across the country has been the acceleration of digitalisation and an explosion of online usage for services such as those in education and medical consultation, which go well beyond traditional online consumption. China has been trying to move up the production value chains and boost domestic consumption to counter overreliance on exports as a driver of economic growth. America’s trade war and domestic digitalisation are two major trends compelling this development.

The Covid-19 pandemic has forced people confined to their homes to use online access in everything from doing their jobs to completing university classes. Growing hostility from the United States also means China has to develop its own tech capacities in such strategic areas as artificial intelligence and semiconductors. It is especially fast in closing the gap with AI chips, the report says.
In sum, this digital convergence has led to an accelerated transformation of the mainland’s tech landscape. For example, against the backdrop of Washington’s aggressive global “war” on Huawei and other Chinese telecoms companies, the nation is pushing ahead with a massive domestic build-up of 5G networks to usher in a new mobile computing era. The Chinese 5G market is worth about US$70 billion-US$85 billion with an estimated 160 million-175 million 5G subscribers, according to the report.

Meanwhile, as regulators loosen rules and tech companies work to reduce their dependence on the US capital market, many are seeking listing or dual-listing on exchanges in Hong Kong and the mainland. Since its launch in June last year, the Science and Technology Innovation Board, or “STAR market”, has outperformed traditional boards in China. Washington is close to passing a new law to force Chinese companies from US exchanges if they do not meet US accounting standards.

We are seeing a convergence of capital and technology in China. Adversities – from the pandemic to America’s antagonism – may prove to be blessings in disguise for China.

This article appeared in the South China Morning Post print edition as: China benefits from tech moves in crisis
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