Finding Greatness in China’s Greater Bay Area (GBA), part III: The GBA as (yet) another “Silicon Valley”

Dr. Jean-Marc F. Blanchard's picture

This series’s first blog notes the GBA seeks to create a global innovation, research, and technology hub in the mold of “Silicon Valley.” There are many reasons to expect success. These range from a “cocktail of inputs” including massive government support to huge capital pools to a strong ecosystem for research to prominent artificial intelligence, health tech, robotics, smart city, and telecommunications players with extensive patents and research and development (R&D) spending to broad and deep (and continuously improving) hard infrastructure.

Even so, there are questions about the GBA’s ability to become more than the sum of the parts and realize its potential. One is the extant need to remove soft infrastructure obstacles relating to currency, customs, legal systems, residency, and tax that hinder flows of capital, goods, and people. A second is the implications of China’s tightening hold on Hong Kong, which some fear will damage its international character, legal system, intellectual property protections, free information flows, and transparency, and, in turn, drive capital, company, and people out of the GBA. A third is China’s repressive/closed data/internet regime. A fourth is a lack of sufficient talent and opportunities for “mixing.” A fifth is the external pressures facing Chinese companies like BYD, DJI, Huawei, iFYTECH, Tencent, and ZTE because of United States (US) sanctions and the fact few of these companies are truly “international.” The first through third challenges do not seem daunting given the intensity of Beijing’s interest in making the GBA succeed, its ability to implement reforms, and leading position in numerous tech realms. The fourth is genuine—hard infrastructure alone hardly ensures “mixing.” The fifth is real, as evidenced by Huawei’s travails, but its future impact remains unclear. In sum, the GBA may not give birth to another Silicon Valley, but we may see something pretty close.