Why Chinese tech companies are racing to set up in Hong Kong

For mainland Chinese tech firms it means they are finding access to capital, customers and trust harder to secure in some international markets. So, they are instead looking to Hong Kong in the first instance.Last year, the number of mainland Chinese firms listing on the Hong Kong Stock Exchange increased to 76, up from 30 in 2024, an increase of 153%, according to a report by accountancy giant PricewaterhouseCoopers.Invest Hong Kong, the investment promotion agency for the special administrative region, has also reported a rise in the number of mainland firms it has helped to set up or expand in the territory, with innovation and technology among the biggest sectors.YunjiXie Yunpeng says the aim is to expand overseas from Hong KongXiaomeng Lu, a director at political consultancy Eurasia Group, says mainland Chinese tech firms are "shifting to Hong Kong" for their primary share listing as "geopolitical headwinds dampen their dreams" to float in New York."These days Hong Kong is their best hope to attract global investors and position themselves as a player not fully constrained by the boundary of the mainland market," she adds.Meanwhile, Wendy Chang of the China-studies" class="entity-link entity-organization" data-entity-id="18346" data-entity-type="organization">Mercator Institute for China Studies, a Germany-based think tank, says Hong Kong is "fashioning itself as a connector to the outside world for Chinese companies", with policies to speed up share flotations and help mainland firms set up operations in the city.This increased focus on Hong Kong comes as the Chinese government in Beijing is aiming for the country to achieve more "technology self-reliance".Significantly reducing its need for foreign hardware and software is now at the centre of its economic policy, especially regarding artificial intelligence and semiconductors.This is a key focus of the country's new 15th Five-Year Plan, which sees technology not just as an economic priority but as a strategic one given tensions with the US.AFP via Getty ImagesHong Kong is seen by some as a useful "halfway house" for mainland Chinese firmsIn this context, the "strategic value of Hong Kong for high-tech Chinese companies" has increased, says Paul Triolo, a Washington-based partner of global business consultancy DGA Group.Alicia Garcia-Herrero, chief economist for Asia-Pacific at French investment bank Natixis, says that Hong Kong offers mainland firms a place where they can show that they can meet international standards while building trust with global investors and clients.For Yunji, that means proving its robots can operate in real-world international settings. The company, which builds its service robots for hotels, hospitals and factories, listed in Hong Kong in October of last year, as it sought to widen its investor base beyond the mainland.MiningLamp Technology, a Chinese AI software company set up its operation in Hong Kong the same month. Its founder, Wu Minghui, calls Hong Kong a "data compliance transfer station", where mainland Chinese firms like his can test how to handle cross-border data flows and build compliance processes before moving into other markets.But even if a mainland Chinese firm is successful in Hong Kong, it can still face barriers overseas.