The gist of it: the guy with his hand on the tiller of the country isn’t cowed or cautious about China’s technology sector. That’s going to help its display manufacturers who are inexorably tied up with EVs and smartphones, and other growth engines.
On the surface, the right conditions are in place for China to rally its engineering and manufacturing industries. Hardware companies led all sectors in total research expenditure. ZTE Corp., Xiaomi Corp. and BOE are among the biggest spenders as they expand in 5G gear, smartphones, EVs and next-generation display technologies, respectively.
Bloomberg
Bloomberg has taken a deep dive into how Chinese leader Xi Jinping has meticulously molded the country’s economy, heavily focusing on the tech sector, and now the emphasis is shifting toward artificial intelligence. Notably, the Chinese hardware sector has seen considerable growth under his leadership, with its accumulated cash reserves ballooning from approximately $20 billion in 2013 to over $100 billion today. Meanwhile, internet companies, such as Alibaba and Tencent, have also amassed considerable wealth, despite regulatory crackdowns and challenges like the Covid Zero lockdown. A significant disparity has emerged between the growth of hardware manufacturing and online services.
In terms of valuation, there is a notable dichotomy between internet and hardware sectors. Tech hardware and chips continue to thrive, whereas internet-dominated industries have barely recouped their pre-pandemic levels. Despite the challenges, Chinese hardware companies, including ZTE Corp., Xiaomi Corp., and BOE, are leading in research and development spending, contributing to advancements in areas such as 5G gear, smartphones, EVs, and next-generation display technologies. This fundamental research, along with a drive towards self-reliance and efforts to develop homegrown technology alternatives, could be pivotal in China’s ongoing tech competition with the U.S.
