Chinese technology corporations are flocking to Hong Kong. As Western checks have intensified amid U.S.-China tensions, they are adopting Hong Kong, which is relatively less regulated, as a "workaround base" to find a breakthrough for overseas expansion.
The BBC reported on the 30th (local time) that Hong Kong is emerging as a window where corporations can seek both fundraising and global credibility. According to a report by PricewaterhouseCoopers (PwC), 76 mainland Chinese corporations listed on the Hong Kong Stock Exchange last year, up 153% from the previous year (30). The share of corporations in innovation and technology is also rising quickly.
Behind this trend lies the so-called "China risk." As the United States and Europe expelled Chinese corporations or restricted investment over data security, mainland corporations chose Hong Kong as an alternative to secure capital and trust. The BBC said, "Hong Kong is connected to the international financial system while maintaining high accessibility to mainland China, serving as a staging post for entry into global markets."
In fact, Chinese robotics corporation Yunji is validating its technology at global chain hotels in Hong Kong as it prepares to expand overseas, and artificial intelligence (AI) corporation MiningLamp is using Hong Kong as a test bed to respond to international data regulations. Eurasia Group director Xiaomeng Lu analyzed, "For mainland corporations blocked from listing in New York by geopolitical headwinds, Hong Kong has become the best hope to meet global investors."
However, some note that Hong Kong is not a perfect haven. Regulations in the United States and Europe remain strong, and concerns about data security and corporate transparency have not been resolved. Since the Luckin Coffee scandal, which was delisted from Nasdaq for past sales fabrication, distrust in the transparency of Chinese corporations has also grown. Changes in Hong Kong's own environment are another variable. The Hong Kong National Security Act implemented after the 2019 pro-democracy protests remains a source of unease for international investors. Paul Triolo, a partner at DGA Group, said, "Hong Kong is not a shield that completely blocks geopolitical risk," adding, "It may be limited to partially mitigating risks between mainland regulation and Western checks."