Bloomberg Intelligence analysts suggest China is positioned to lead in AI models by 2030, though the nation faces challenges in achieving parity in chip manufacturing. While software optimization allows for cost-effective AI deployment, local firms currently struggle to monetize these innovations due to intense price competition.
The Hang Seng Tech Index is undergoing a significant restructuring to better reflect the growth of China's high-tech sector. In December, the index will expand from 30 to 50 members. The selection criteria will prioritize market value for 40 companies and sales growth for the remaining 10. The new constituents will be announced on November 20, with changes effective December 7.
Currently, two AI model developers, Zhipu and MiniMax, are included in the index with initial weights of 0.53% and 0.36% respectively. Analysts expect the overhaul to increase exposure to robotics and advanced hardware. Despite these shifts, Bloomberg Economics projects a slowdown in China's average economic growth to 3.6% over the next decade.
Regarding the semiconductor sector, China is expected to narrow the technology gap by 2030 without achieving full self-sufficiency. Trade restrictions remain a hurdle, as evidenced by limited sales of Nvidia H200 chips. Bloomberg Intelligence notes that these constraints may force China to diversify its industrial expansion across more international markets.
