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Almost all participants in a recent quarterly survey assessing their outlook on China’s domestic stock market believe that the country’s technological progress will reach the level of developed nations within the next decade. According to the latest investor sentiment report, about 94% of respondents think China will close the gap with advanced countries in technological innovation over the next ten years.
The fourth-quarter survey was carried out last month by the Cheung Kong Graduate School of Business, garnering approximately 2,100 valid responses from roughly 1,300 retail investors and 800 financial industry professionals.
Liu Jin, a professor of accounting and finance and head of the school’s Investment Research Center, remarked during the report’s launch that China is transitioning from a middle-income economy. He emphasized the need for the country to shift from a development model relying on low-tech industries toward a high-tech economy to sustain growth.
Investors’ confidence in China’s future technological advancements appears closely tied to their views on the country’s economic prospects, which also influence their expectations for the stock market. Nearly 80% of those surveyed acknowledged that artificial intelligence could cause significant disruptive changes. When the survey was conducted a year earlier, only about 60% shared this view.
Furthermore, approximately 60% of participants believe that advancements in AI are unlikely to result in widespread unemployment, indicating a predominantly optimistic and pragmatic attitude towards technological progress.
Liu noted that a notable feature of China’s R&D landscape is the significant role played by the corporate sector. From 2015 to 2023, the portion of R&D funding coming from businesses increased to 72%, up from 69% during 2005 to 2014. He explained that Chinese companies tend to exercise tight cost controls on R&D activities, which has helped maintain high efficiency and produced cost-effective innovations. However, this approach has also resulted in underinvestment in fundamental scientific research, potentially leading to stagnation in some sectors.
To truly escape the cycle of stagnation in innovation, Liu urged companies to adopt a bolder approach by investing heavily in basic, large-scale, and groundbreaking research. He emphasized that the primary benefit of tech investments for firms is not just increased productivity but also gaining monopolistic advantages through intellectual property rights.
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