Against the background of the widespread paranoia regarding security concerns around the Chinese technological giants, Beijing is now challenging the US for global technological dominance.

The new CB Insights report shows how fast Beijing reaches Silicon Valley, a region that has long been recognised as a centre of the technology innovation economy. According to the report on global technology centres, Silicon Valley is still dominant at the moment, with the highest priority in the number of financing circles for young companies.

“From 2012, the technology companies based there made a total of 12,000 transactions, followed by New York based companies with 5,000 deals,” the report said. “For funding, the Silicon Valley companies brought a total of 140 billion dollars, and Beijing comes second with 75 billion dollars.”

But all this is changing rapidly: “Beijing and Shanghai are ready to be the technological centres of the future,” the report said. “They lead among the high growth centres, regarding the most “unicorns” companies, to financing in particularly large amounts and to major IPOs on the stock exchange. The creation of companies there is also accelerating.”

The report sets out a number of reasons why Beijing and to a lesser extent Shanghai can exceed Silicon Valley in the coming years. The first is the IPOs that the region takes into account.

“The surplus of profits helps to accumulate new capital in the ecosystem, as investors do not want to miss the next big stock exchange rate. and Alibaba were one of the world’s biggest breakthroughs during the research period and will feed more resources and talents,” the report said.

It also notes that since 2012 Beijing has had 30 IPOs of over $100 million, including whose IPO is estimated at about 26 billion dollars. Shanghai has 20 IPOs estimated at over $100 million.

The second factor: Beijing and other Asian technology centres take advantage of the Softbank’s cheque book. The Japanese holding company portfolio includes more than 65 companies in Asian centres, showing how a single investor stimulates the growth of technologies throughout Southeast Asia.

For the moment, Silicon Valley continues to lead on a global scale with 57 unicorns, while Beijing has 29, and Shanghai – 11. But in the first quarter of 2018. Shanghai and Beijing combined have 3 new unicorns, equal as the Silicon Valley.

While Beijing and Shanghai are lagging behind the Silicon Valley with regard to venture capital transactions, the US marks a slight decrease in the number of transactions over the last two years. Meanwhile, the growth of venture capital transactions in Beijing and Shanghai is intensifying.