Greater Bay Area trails peers in basic research despite strong tech potential: Deloitte

The Guangdong-Hong Kong-Macau Greater Bay Area (GBA) is lagging behind China’s national average in basic research, despite showing strong potential in sectors such as semiconductors and smart manufacturing, according to Deloitte.

The cluster of cities in southern China, which included Shenzhen, spent about 28.9 billion yuan (US$4.2 billion) on basic research in 2024, accounting for just 5.67 per cent of total spending in research and development (R&D), the consulting firm said in a report released in Hong Kong on Thursday.

That compared with a national average of 6.9 per cent, and significantly higher levels of 14.5 per cent in the US and nearly 15 per cent in South Korea, according to the report.

“Innovation in the GBA remains largely application-driven, with investment ramping up only when there are clear use cases, while basic science and original innovation remain relatively weak,” said Polly Lee, China deputy audit and assurance leader at Deloitte.

The GBA – comprising Hong Kong, Macau and nine mainland China cities – has emerged as one of the country’s most important technology hubs.

Anchored by Shenzhen – often dubbed China’s “Silicon Valley” – the region is home to leading firms such as Huawei Technologies, Tencent Holdings, DJI and BYD, forming a dense ecosystem spanning hardware, software and advanced manufacturing.