Investec Asset Management has pointed to an emerging technological economy within China that is home to 2,500 incubators and one-third of the world's 'unicorns' (start-ups valued at more than US$1 billion).
In a report on China titled Zen and the art of bicycle finance (referencing Chinese bike-sharing start-ups Ofo and Mobike), Investec portfolio manager Archie Hart laid out the case for much higher investors' technology allocation to China.
While the market tends to focus on 'old China', there is a vibrant 'new China' with "abundant start-up capital, risk taking start-up and venture capital investors, dynamic entrepreneurs, and the rapid roll-out of new technological solutions to old problems," Mr Hart said.
Mobile payments are 11 times higher in China than in the US, he pointed out – and Didi Chuxing, China's version of Uber, is "five to six times the size of Uber in its own domestic market of the US".
China is also leading the world in areas such as robotics, voice recognition and electric cars, Mr Hart said – and the country has "the biggest robot market in the world".
Furthermore, technology makes up 40 per cent of China's stock market, he said.
"China’s venture capital industry has grown from US$12 billion in 2011-13 to US$77 billion in 2014-16," Mr Hart said.
"China is now one of the biggest global funders of venture capital investment across a wide range of technologies (second only to the US in most cases) including being the leading VC market for fintech and second for education technology, virtual reality, wearable technology, robotics and drones," he said.
