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Hong Kong's new role in Chinese tech expansion
A delivery robot glides through a Hong Kong hotel lobby, navigating crowds and elevators to reach its destination. The seamless operation masks the complexity behind its design-one that must adapt to real-world chaos. For its maker, Yunji, the city serves as a proving ground before targeting overseas markets.
Why Chinese firms are turning to Hong Kong
Mainland Chinese tech companies are increasingly using Hong Kong as a strategic hub to raise capital, test products, and build international credibility. This shift comes as geopolitical tensions with the U.S. and Europe create barriers to direct expansion into Western markets.
Last year, 76 mainland firms listed on the Hong Kong Stock Exchange, a 153% increase from 2024, according to PricewaterhouseCoopers. The city's investment agency, Invest Hong Kong, also reported a surge in mainland tech firms setting up or expanding operations there.
"Hong Kong is their best hope to attract global investors and position themselves as players not fully constrained by the mainland market,"
Xiaomeng Lu, Eurasia Group
Policy tailwinds and strategic priorities
Hong Kong's government has introduced policies to accelerate share flotations and support mainland firms in establishing local operations. Wendy Chang of the Mercator Institute for China Studies describes the city as a "connector to the outside world" for Chinese companies.
This aligns with Beijing's push for technological self-reliance, a cornerstone of its 15th Five-Year Plan. The plan prioritizes reducing dependence on foreign technology, particularly in AI and semiconductors, amid escalating U.S. tensions.
Paul Triolo of DGA Group notes that Hong Kong's strategic value for Chinese tech firms has grown, offering a platform to demonstrate compliance with international standards while building trust with global investors.
Success stories and compliance challenges
Yunji, which builds service robots for hotels, hospitals, and factories, listed in Hong Kong last October to diversify its investor base. Another firm, AI software company MiningLamp Technology, established a Hong Kong presence the same month. Its founder, Wu Minghui, calls the city a "data compliance transfer station," where firms can test cross-border data flows before entering other markets.
Persistent barriers in Western markets
Even with a Hong Kong foothold, Chinese firms face hurdles abroad. The U.S. and Europe have tightened national security reviews of Chinese investments, citing concerns over data access and critical infrastructure. Some countries, including the U.S. and UK, have restricted or phased out Chinese suppliers from telecom networks.
Broader skepticism persists over governance and transparency, exemplified by the Luckin Coffee scandal, where fabricated sales led to its delisting from Nasdaq in 2020.
Hong Kong's evolving limitations
While Hong Kong offers advantages, its appeal to international firms has waned since 2019, following the imposition of a national security law and local legislation. Critics argue these measures have curtailed political freedoms, though authorities defend them as necessary for stability.
Triolo cautions that Hong Kong is not a "geopolitical shield" for mainland firms, as they remain subject to Beijing's evolving rules on cybersecurity, data controls, and AI regulations.
