The United States has traditionally been viewed as the global leader in technological innovation, anchored by Silicon Valley’s entrepreneurial spirit and its dominance in equity markets. However, this long-held perception is now being actively challenged by China, which has emerged as a formidable force across a diverse range of high-tech and energy sectors. Ben Way, head of Macquarie Asset Management, highlighted at the Top1000funds.com Fiduciary Investors Symposium at Stanford University that Chinese advances span advanced materials, hydrogen, robotics, and synthetic biology—areas where China arguably leads today.

Shenzhen epitomises this transformation, described by Way as “the city of the future,” where innovation is fuelled by robotics and electric vehicle (EV) technology hubs. Major companies such as CATL and BYD have set new benchmarks in precision manufacturing, achieving levels of quality and scale that surpass many global competitors. Way noted the exceptional technological precision these firms achieve, exceeding the output quality of rivals who struggle to match even lower precision levels.

China’s broad-based push aligns with national strategic initiatives like 'Made in China 2025,' which aims to propel domestic manufacturing capabilities forward in sectors including artificial intelligence, 5G, aerospace, semiconductors, electric vehicles, and biotechnology. Supporting these objectives, China has become dominant in robotics, installing significantly more robots than any other country—installing six times more robots than Japan in 2023 alone, according to the Millennium Project’s Global Challenge report. Moreover, partnerships such as BYD’s collaboration with Hong Kong University of Science and Technology to advance AI in manufacturing underline the country’s dedication to integrating cutting-edge technologies into industrial processes.

Recognition from international bodies further cements China’s role as an innovation leader. The World Economic Forum recently acknowledged Chinese companies like Qingdao Hisensehitachi and Sanmen Nuclear Power for their pioneering use of AI and robotics to boost operational safety and productivity. Alongside technology, China is aggressively pursuing decarbonisation efforts, adding substantial renewable energy capacity—277 GW of solar PV and 79 GW of wind power in 2024—and leading global electric vehicle markets with sales surpassing 11 million units, comprising over half of world EV sales for that year.

Yet, Way emphasises that real asset opportunities extend well beyond the US-China technology rivalry. Deglobalisation trends and security concerns surrounding supply chains, critical minerals, and energy resources are creating new investment opportunities globally, particularly among the world’s top 30 investable markets. Japan, for example, now offers extensive avenues for large-scale capital deployment, including acquiring control stakes in various sectors, a scenario markedly different from a decade ago. South Korea remains a key market in Asia, where Macquarie has established a long-lasting impact through infrastructure investments that have supported the nation’s shift towards tech exports.

Emerging markets such as India provide perhaps even more substantial opportunities, particularly in sectors like transport electrification. With a population of 1.4 billion and much of its vehicle fleet still dependent on diesel engines, India’s need to modernise and electrify transport infrastructure represents a major, necessary investment realm.

Despite geopolitical polarisation, volatility, and unequal access to opportunities, Way expresses optimism about the future, buoyed by the diversity and scale of real asset investments now available worldwide. The evolving landscape signals not only shifting innovation powerhouses but also a broader, more inclusive set of opportunities across sectors and regions for institutional capital.

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Source: Noah Wire Services