Deep Tech

Deep tech refers to innovation rooted in advanced science and engineering, spanning AI, green technology, semiconductors, and intelligent manufacturing. In 2025, generative AI and smart energy systems are set to scale rapidly, making deep tech a key driver in tackling climate and digital transformation challenges.

Global leaders each offer unique strengths; the U.S. leads in capital and innovation; while Europe excels in research and sustainability. In 2024, Europe attracted €15B in VC funding—28% of all VC—with AI and energy tech seeing the fastest growth. The UK hosts nearly 3,500 deep tech firms, many spun out from universities like Oxford and Cambridge.

Public policy adds further momentum. The European Innovation Council (EIC) manages a €70B portfolio backing companies like Darktrace and Nearfield. Europe’s strength in photonic computing and global talent inflow reinforce its edge in frontier technologies.

For Chinese companies, the mature deep tech ecosystems in Europe and the U.S. offer substantial opportunities for collaboration, from technology partnerships to cross-border R&D and market entry.

At the same time, China’s rapidly evolving deep tech landscape—powered by a vast market, bold policy initiatives, and cutting-edge applications—presents attractive opportunities for global innovators seeking access to growth and scale.

The global artificial intelligence (AI) market is undergoing rapid expansion and is projected to grow from approximately $757.6 billion in 2025 to $3.68 trillion by 2034, reflecting a compound annual growth rate of 19.2%. Different regions are pursuing distinct paths based on their strengths and strategic priorities.

The U.S. continues to lead globally in AI, supported by €62.5 billion investments in private sector in 2023. Its advantages lie in cutting-edge innovation, world class talent, and a mature venture capital. However, rising concerns over tariffs on semiconductor imports may impact AI infrastructure expansion. In China, AI growth is driven by a powerful combination of policy support and market demand. Notably, Chinese companies ordered over $16 billion worth of Nvidia H20 chips in Q1 2025 alone, reflecting a pressing demand for computational power.

Europe maintains a solid foundation in AI through its research institutions and affluent consumer base. However, its highly cautious regulatory environment may limit innovation. To address this, French President Emmanuel Macron has unveiled a €109 billion national investment plan to strengthen computing capacity and data infrastructure. Meanwhile, countries such as the UAE, Saudi Arabia, South Korea, and Japan are accelerating AI investment to boost global influence.

AI is now a focal point of global technology competition. For Chinese enterprises expanding internationally, a nuanced understanding of regional dynamics and technology policy will be critical for crafting impactful global strategies and forging effective partnerships. Likewise, for international companies aiming to engage with China’s thriving AI ecosystem, understanding its regulatory environment, innovation landscape, and commercial channels is equally essential.

Green Tech

Green technology is at the forefront of global efforts to combat climate change, reduce carbon emissions, and transition toward a sustainable economy. Countries worldwide are actively investing in renewable energy, energy storage, electric mobility, carbon capture, and circular economy initiatives.

China is a global leader in renewable energy. It is home to several of the world’s largest solar farms, and it produces over 80% of the world’s solar panels and over 75% of the global lithium-ion battery, with companies like CATL and BYD setting industry standards.

Benefiting from the world’s highest solar irradiation levels, the Middle East is striving to develop large-scale solar energy projects. The UAE is home to the Mohammed bin Rashid Al Maktoum Solar Park, one of the largest solar parks in the world, which aims for 5 GW capacity by 2030. Saudi Arabia is also investing heavily in solar energy through its Vision 2030 plan.

The UK and Europe provide policy leadership, regulatory frameworks, and advanced R&D. The UK, in particular, is pioneering green technology innovation through research backed by universities such as Oxford, Cambridge, and Imperial College London.

At the same time, China’s green tech sector—underpinned by global manufacturing leadership, robust domestic adoption, and ambitious sustainability goals—offers international enterprises compelling opportunities for collaboration, technology integration, and market access.

AR/VR

Augmented Reality (AR) and Virtual Reality (VR) technologies have seen rapid advancements in recent years, expanding beyond gaming and entertainment into sectors such as healthcare, education, manufacturing, and retail. AR enhances the real world by overlaying digital content, while VR creates fully immersive virtual environments. As consumer and enterprise adoption increases, the global AR/VR market is expected to expand significantly in the coming years.

The United States, China, and Europe are at the forefront of AR/VR development. The U.S. dominates the industry through tech giants like Meta, Apple, and Microsoft, who continue to invest heavily in VR headsets, AR glasses, and immersive platforms. In China, a vast domestic market and strong industrial foundation have enabled the development of a comprehensive AR/VR supply chain. Companies such as Tencent, ByteDance, and Huawei making significant progress in both hardware and content ecosystems. Europe excels in industrial applications of AR/VR, particularly in medical training, automotive design, and architecture, with companies and research institutions in France, Germany, and the UK driving technological commercialization forward.

As the concept of the Metaverse gains traction, AR and VR are poised to play a crucial role in shaping the future of social interaction, remote work, and digital experiences. With ongoing advancements in hardware, richer content ecosystems, and AI-powered interactions, these technologies will continue to evolve towards more seamless and intuitive integration with everyday life. Countries and companies worldwide are competing to establish themselves as leaders in this next-generation computing revolution.

For Chinese companies, global advancements in AR/VR offer vast collaboration opportunities—from immersive content co-development to cross-border technology licensing. Likewise, international players looking to enter China’s fast-growing AR/VR ecosystem can tap into its scale, production capabilities, and rapidly maturing user base to accelerate localization and market expansion.

Advanced Air Mobility (AAM)

AAM focuses on next-generation aviation technologies, particularly eVTOLs (electric vertical take-off and landing vehicles), drones, and autonomous air systems, set to transform transportation, logistics, and other services. Morgan Stanley forecasts the global AAM market could reach $1 trillion by 2040, with the US and Europe as significant contributors.

The U.S. and Europe have emerged as hotbeds of AAM innovation, driven largely by private-sector pioneers and a regulatory framework that’s evolving to keep pace. The European drone sector alone is projected to generate over €10 billion annually and employ 100,000 people within 20 years. Moreover, over $5.5 billion has been invested in U.S. eVTOL startups by 2024, with companies such as Joby, Archer, and Beta Technologies securing roughly 76% of total funding.

China is also rapidly scaling its low-altitude economy. Reports indicate that by the end of 2025, China's low-altitude economy is projected to reach 3.5 trillion yuan by 2035. Shenzhen, a leading city in the drone sector, is home to over 1,700 drone companies, among which DJI is the most prominent one, holding over 70% of the global consumer drone market. Meanwhile, Shanghai is accelerating its AAM build-out, aiming for an industrial scale exceeding ¥50 billion by 2027. National projections estimate that China’s low-altitude economy could grow to ¥3.5 trillion by 2035.

Governments and enterprises worldwide are increasing investments to improve related industrial chains and implement innovative applications, indicating that AAM is set to become a new engine for economic growth.

Smart Manufacturing

The global smart manufacturing sector is undergoing rapid transformation, driven by the integration of IoT, AI, and big data. Key trends include accelerated digital transformation, the rise of distributed manufacturing, enhanced automation, green production practices, and global supply chain restructuring. Meanwhile, talent development and workforce reskilling have emerged as vital components for sustaining innovation in this evolving landscape.

Major markets each bring unique strengths to smart manufacturing. The United States leads in technological innovation and industrial ecosystems, advancing next-generation manufacturing to regain global competitiveness. China stands out with its vast market scale and robust industrial base, especially in smart robotics and industrial IoT infrastructure. Germany, the birthplace of “Industry 4.0,” excels in setting global standards and high-end equipment manufacturing. Japan contributes deep expertise in precision engineering and robotics, while South Korea offers strong capabilities in semiconductor and electronics automation.

The global smart manufacturing market is projected to grow from USD 349.48 billion in 2024 to USD 998.99 billion by 2032, with a CAGR of 14.0%. Across the world, governments and industries are leveraging their comparative strengths to accelerate smart manufacturing, making it a key engine for the next wave of global industrial transformation.

Technological breakthroughs are reshaping the world at an unprecedented pace. With the support of our extensive international network, we empower industry pioneers to stay ahead of the curve, providing seamless and efficient solutions to help you achieve your objectives with confidence.