Expressions of aspiration for the Guangdong-Hong Kong-Macao Greater Bay Area sometimes refer to it as the “Silicon Valley of China”. But it is much more than that, for a specific reason.

A complete and well-functioning technological civilization requires both hardware and software. And it requires the integration of those two by a community of engineers who have, together, what Dan Wang, author of the 2025 book, Breakneck: China’s Quest to Engineer the Future, calls “process knowledge”. Silicon Valley is famous for making software: software for artificial intelligence, social media, microchips, and smartphones. It was once also the leader in designing and making the leading hardware for the microtechnology age: Hewlett-Packard calculators and computers; Intel microchips; Apple iPhones; Tesla electric cars.

And of course, the United States was once the world leader in other kinds of hardware manufacturing too, notably automobiles, airplanes, trains, nuclear power plants, farm equipment, and many other products that, as the saying goes, would hurt if you dropped them on your foot — though it still leads in the manufacture of military weapons other than drones.

But the US is not good at making hardware anymore. It has difficulty even building and repairing infrastructure like bridges, roads, and long-distance high-voltage transmission lines, let alone high-speed trains. When it lost the ability to engineer and build hardware, it may have acquired the ability to create social media platforms, but it also lost its process knowledge.

Meanwhile, China has taken the top spot worldwide in hardware manufacturing. In the green energy technology sphere alone, according to the Brookings Institution, in 2024 China manufactured 92 percent of the world’s solar modules, 82 percent of its wind turbines, 66 percent of its electric vehicles, and over 85 percent of the world’s battery capacity. China installs more industrial robots than the rest of the world combined, and it makes the most drones. It makes the lion’s share of many other mechanical and electrical devices for civilian use as well.

Not all of this hardware is made in the Guangdong-Hong Kong-Macao Greater Bay Area, of course, but a lot of it is. And what is made elsewhere in China is closely linked to the Greater Bay Area, the foremost center of China’s manufacturing explosion over the last 40 years.

But, as Wang would say, the mere fact that China leads in these manufacturing sectors does not, by itself, constitute its leadership. It is the fact that it has process knowledge, resulting from its combination of hardware manufacturing excellence, software excellence — even if perhaps slightly behind the US — and the intimate knowledge gained through experience of integrating the two.

In his book, Wang identifies what he says is the key difference between China and the US: Engineers run China; lawyers run the US. But he might as well have said that China’s industry is run by mechanical, chemical, and industrial engineers, and other kinds of physical-process engineers, while software engineers run US industry.

Yet China has come to excel at software engineering as well, not far behind Silicon Valley in many respects, ahead of it in others. But most importantly, it has process knowledge of both hardware and software engineering, intimately integrated. The US thought software engineering could be separated from hardware engineering, as, for example, Nvidia’s microchip design is separated from TSMC’s microchip manufacturing and ASML’s extreme ultraviolet lithography.

Process knowledge enables AI software to be easily integrated with robotic hardware. In the US, many Silicon Valley leading lights hardly think about hardware at all, or even, it sometimes seems, understand the need for it. One need only, for example, read the book If Anyone Builds It, Everyone Dies: Why Superhuman AI Would Kill Us All, by Silicon Valley figures Eliezer Yudkowsky and Nate Soares. The book might have been ignored if it were not written by authors well known and respected in Silicon Valley. But to read the book, you would think they don’t know how the material world works. The book argues that when AI achieves something called superintelligence, it will kill everybody through various physical measures that are absurd, such as creating millions of nuclear fusion reactors to heat the Earth to unbearable levels or blotting out the sun’s rays by surrounding it with “Dyson swarms of solar panels”. Some Silicon Valley elites seem to think the world is nothing more than software and no longer understand the material world.

The Chinese version of Silicon Valley would never make such an error. The Greater Bay Area is and will remain a center for many industrial activities, both software- and hardware-based. Even the field of finance, in which the Greater Bay Area strives to be a leader, must be thoroughly hardware- and software-aware. The best investors in technology are those who make a concerted effort to understand it.

The aspirational desire for the Greater Bay Area to be the “Silicon Valley of China” suggests that China still retains a trace of the inferiority complex it had when it was well behind the West, particularly the US, in technology, engineering, and science. Although it represents a change that has occurred with startling rapidity, that is no longer the case. The Greater Bay Area does, and will, outperform Silicon Valley by most measures.

The author is a mathematician and economist with expertise in the finance, energy and sustainable-development fields. He is an adjunct associate professor at the Hong Kong University of Science and Technology.

The views do not necessarily reflect those of China Daily.