Shanghai closest rival to Silicon Valley in tech innovations: KPMG

The US and China remain the most promising markets for technology breakthroughs, but Chinese cities including Shanghai and Beijing are chasing at a faster pace to challenge the dominance of US cities.

Shanghai is regarded as the leading hub outside of Silicon Valley for technology innovations for the next four years, according to a KPMG report released on Monday.

The report, claiming to reflect the viewpoints of over 800 global technology business leaders, placed Shanghai, New York, Tokyo, Beijing, and London in the first five places.

The report explained that Shanghai became the top pick outside of Silicon Valley -- with favorable votes surging to 26 percent this year from 17 percent a year ago -- as the Chinese financial center is bound to remain among the world's leading innovation hubs "given its growing base of digital media and entertainment companies" and offers "a more pleasurable lifestyle and favorable climate that can draw top talents".

The US remains the market to show the most potential for leading edge advances, according to the report, a view supported by 26 percent of respondents, down from 29 percent a year ago. China remains in second place, with 25 percent of favorable votes this year, a slight uptick from 23 percent last year.

"China continues to make raid gains as the country moves from manufacturing to an innovation powerhouse led by its large mobile and digitally advanced consumer and enterprises base," said the report, which highlights major Chinese technology players including Baidu, Alibaba, and Tencent.

Despite being the home city to various Chinese technology giants including Tencent, Huawei, and ZTE, Shenzhen only ranks 13th in the report.