The world’s largest drone company, DJI, could have been set up in Hong Kong, but it was eventually moved to the Chinese mainland city of Shenzhen. It begs the question, why is Hong Kong not a suitable place for nurturing startups?

Shen Nanpeng, managing partner of Sequoia Capital China and the number one investor from China in the Forbes Midas List for the past five years, told CGTN's The Point with LIU Xin (@thepointwithlx) that in the past 20 years, successful companies were those which could spread their applications into a large market, which Hong Kong lacks, so it was difficult for entrepreneurial companies in Hong Kong to stand out. 

But he also pointed out that things are about to change.

"Since we are heading to a new stage – artificial intelligence – Hong Kong would have a much better chance," Shen said. "Hong Kong has some wonderful universities and research institutions. We obviously haven’t seen big companies incubated here, but there are many technologies that could be applied in the real world and create some really valuable companies.”

In 2015, Hong Kong’s government established an institution called Innovation and Technology Bureau. In its policy address for 2016, it laid out increased investment in the sector, including a venture capital fund worth two billion Hong Kong dollars (250 million US dollars).

Besides the commitment from the government, there is also support from around the world. The Massachusetts Institute of Technology set up its first overseas “Innovation Node” in Hong Kong. The Alibaba Group launched a billion-USD Hong Kong Entrepreneurs Fund. Shen Nanpeng also led Sequoia Capital to initiate the Hong Kong X-Tech Startup Platform.

“Hong Kong X-Tech Startup Platform is trying hard to commercialize those technologies and products from the universities. We want to create the next DJI in Hong Kong,” Shen said.