Analysis
The Greater Bay Area (GBA) has long been touted as China’s Silicon Valley, but a new wave of capital, policy and consumer adoption is giving the region’s technology ecosystem an even sharper edge. From Shenzhen’s hardware labs to Zhuhai’s data centers and Guangzhou’s biotech clusters, the GBA is fast becoming the epicenter of China’s next growth cycle – and investors are beginning to take notice.
Eric Wong, founder of Stillpoint Investments and a veteran of New York hedge fund Blue Ridge Capital, calls the moment a “once-in-a-decade opportunity,” he said in an interview with The Australian, published yesterday. His firm has been building exposure to Chinese tech stocks at what he sees as bargain valuations, with a particular eye on artificial intelligence infrastructure and precision manufacturing – two sectors where the GBA plays an outsized role.
“China’s markets continue to trade at a meaningful discount to the S&P,” Wong notes, pointing to price-earnings ratios of 12–13 times compared with more than 20 times in the US. “From a cashflow yield perspective, China is trading at 7 percent-plus while the US is at slightly less than 3 percent.” In other words, investors are buying into the GBA’s tech backbone at half the global price.
AI infrastructure at scale
The standout story is artificial intelligence. Across the GBA, companies like ByteDance, Alibaba Cloud, Tencent and Huawei are ramping up their data-center investments. Wong estimates AI infrastructure capital expenditure is rising by 60 percent year-on-year – a staggering number that underscores the scale of demand.
These hyperscalers are pushing beyond Beijing and Shanghai, with new clusters of servers, fiber links and green-powered facilities spreading into Shenzhen, Foshan and Dongguan. Such capacity will underpin generative AI, autonomous vehicles, fintech, and robotics – all sectors where the GBA has an established edge.
Global comparisons highlight the opportunity. Data-center operators in China trade at 12–13 times EBITDA, compared with above 20 times in the US and Europe. Political noise around US chip bans clouds sentiment, but Wong stresses that “they will still need the data centers.” The question is not whether China builds, but which chips power the build-out.
Precision manufacturing in a fragmenting world
Wong’s second focus is precision manufacturing – another GBA hallmark. Shenzhen’s long dominance in contract electronics manufacturing is being upgraded into high-precision components, medical devices, and advanced materials. Zhuhai and Dongguan are moving up the value chain, supplying both Chinese multinationals and global firms seeking to diversify supply chains.
“In a more de-globalised world, these businesses are in a position to benefit,” Wong argues. As supply chains rewire toward Southeast Asia, Latin America and even Africa, GBA firms are exporting know-how and capacity. Many of these companies trade at single-digit earnings multiples and yield dividends of 8–9 percent, making them unusually attractive in a yield-scarce global environment.
Everyday Integration of Technology
Beyond balance sheets, Wong stresses the lived experience of technology in China. On his frequent trips – he spends a third of his time in the country despite being New York-based – he highlights how the GBA’s urban hubs integrate tech seamlessly into daily life.
Hotels deploy robots to deliver room service. Apps track washing machine availability in real time. Retailers roll out cashier-less checkouts. These small but meaningful conveniences create an ecosystem where consumers expect – and adopt – tech solutions quickly. For investors, this consumer readiness lowers adoption risk for new platforms.
Signs of a market turn
After years of gloom, Wong sees indicators that Chinese equities – many of them GBA-anchored tech names – may be entering a new cycle. Southbound capital flows into Hong Kong have already surpassed 2024 totals. IPO activity is picking up, margin trading is rising sustainably, and Chinese household deposits fell for two consecutive months as money shifted into equities.
Crucially, Wong believes domestic investors must lead the rebound: “This closing of winter in Chinese equity markets needs to be led by the domestic investor,” he said in the interview by The Australian.
For global investors, the message is clear: ignoring China – and especially the GBA – means ignoring the world’s second-largest economy and its fastest-evolving tech hub. While Washington and Beijing continue to spar over chips and security, the capital being poured into AI infrastructure and precision manufacturing is laying down physical assets that will drive productivity gains for a decade.
The GBA’s unique advantage is its integration of finance in Hong Kong, innovation in Shenzhen, industrial heft in Dongguan, and logistics in Guangzhou–Zhuhai–Macau. Now, with valuations depressed and policy tailwinds supportive of AI, green tech, and advanced manufacturing, the region looks poised for outsized returns.
“Every investor has to visit, at the very least,” Wong says. The GBA may not be a risk-free bet – no emerging tech cluster ever is – but the combination of scale, speed and adoption makes it impossible to dismiss. By Times reporter
Key Takeaways
- Depressed valuations make GBA tech firms highly attractive, trading at half Western multiples despite surging AI infrastructure investment.
- Precision manufacturing in Shenzhen, Zhuhai and Dongguan benefits from supply chain shifts, offering strong dividends and single-digit earnings multiples.
- Everyday integration of technology across the GBA accelerates consumer adoption, creating fertile ground for innovation and long-term investor confidence.
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