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

Key findings

The Guangdong‑Hong Kong‑Macau Greater Bay Area (GBA) is falling behind in basic research despite a dense, high‑tech ecosystem, Deloitte said in a report released in Hong Kong. The cluster — which includes Shenzhen and the cities of Hong Kong and Macau — spent about 28.9 billion yuan (US$4.2 billion) on basic research in 2024, equivalent to just 5.67% of its R&D outlays. That compares with a national Chinese average of 6.9% and far higher shares in the US (14.5%) and South Korea (nearly 15%).

Strengths and gaps

The GBA is home to major technology firms and heavy industrial capacity, anchored by Shenzhen and firms such as Huawei (华为), Tencent (腾讯), DJI (大疆) and BYD (比亚迪). Yet Deloitte argues the region’s innovation remains largely application‑driven: investment tends to surge when clear commercial use cases appear, while basic science and original innovation remain relatively weak, a pattern the consultancy says is compounded by talent shortages.

Why it matters

A shallow basic‑research base risks capping long‑term technological leadership even as the region scales semiconductor fabs, smart manufacturing and AI deployment. Geopolitical pressures — including reportedly tight US export controls on advanced semiconductors and other trade restrictions — have intensified Beijing’s push for self‑reliance, but policy shifts and more sustained funding for basic science, plus talent cultivation, will be required to turn the GBA’s strong applied capabilities into foundational breakthroughs. How quickly that transition happens will shape not only China’s tech trajectory but global supply‑chain competition.