The city of Hangzhou is one of the most historic and beautiful in China.

But this ancient place now has the most modern of reputations, as China’s ‘Silicon Valley’.

A vibrant hub for entrepreneurs and high-tech start-ups, Hangzhou is home to headline-grabbing success stories like Alibaba and breakthrough AI firm, DeepSeek.

In the context of escalating competition with America, the world is increasingly paying attention.

Those who are part of the tech scene here brim with enthusiasm.

Over coffee, in an ultra-modern city complex, they describe how exciting this moment feels, not just for their businesses, but for China too.

“We have the talents, we have the environment, and we have the full supply chain, even though we have a challenging environment,” says Grace Zheng, who has worked at the AI glasses creator Looktech since its inception.

“It’s our time.”

The others laugh and nod. “I agree with it,” says Jia Dou, whose company Wuli Coffee, creates high-tech, automated commercial coffee machines. “And I think it’s our time to show and battle with other foreign countries.”

And is that a battle China could now win, I ask? “Of course,” comes the answer.

They tell stories of how estate agents in Hangzhou dedicated hours of their time for free to find the perfect laboratory space, and how the local government showered them in grants and incentives; so hungry is this city for tech success.

“Hangzhou says we’ll provide the sunshine and the water, you go ahead and grow,” explains Zhang Jie.

She is the convenor of this group. An entrepreneur herself and the founder of a thriving ‘incubator’ for start-ups, she has invested in and mentored all the others around the table.

She is passionate, energetic and has a second-to-none understanding of what makes Hangzhou and China’s tech scene so successful.

“In China, we have more than 10 million university and college students graduating. Then we’re talking about at least five to six million engineers with college education background,” she says.

“So with such a large group of young and intelligent people with a good environment, a favourable environment for entrepreneurship, I’m sure there will be even greater companies coming in the future.”

Indeed, a combination of light-touch local regulation, (unusual in China more broadly), coupled with one of the most business-oriented and free-thinking universities in the country, Zhejiang University, is viewed by many as the secret sauce in Hangzhou.

Zhang says she has had more young people approach her with business ideas in the last quarter than at any other time before, and she is full of optimism about the current wave.

“They are already companies [in China that will] probably be greater than Apple, right?” She laughs.

And she may well be right.

But there is one name in particular, born and bred in Hangzhou, that has captured the world’s attention in recent months.

When DeepSeek unveiled its latest open-source AI model earlier this year, it stunned the world, claiming to be as good as western competitors for a fraction of the price.

Many are now talking about the ‘DeepSeek moment’, a moment that turbocharged confidence within China and made the rest of the world sit up and take notice.

Indeed, successes like this are being lauded by China’s leaders. In February, tech bosses, including DeepSeek’s founder Liang Wenfeng, were invited to a symposium with Xi Jinping and his top team.

Photo ops and handshakes with the president, an abrupt change from the crackdown they faced just a few years ago. In fact, tech is now being positioned as a key pillar in China’s future economy, repeatedly highlighted in official communications.

But what is seen as inspiring innovation in China is viewed by the United States as a threat.

Donald Trump is moving to ramp up restrictions, including more export controls on chips being sold to China.

Read more from Sky News:
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Businesses in Hangzhou are of course aware of the trade war unfolding around them, many who export to America will take a significant hit, but most think they can cope.

Dr Song Ning is one of them. He proudly shows us his factory, which is integrated with the lab work and R&D side of his business.

His company, Diagens, uses AI to massively speed up medical diagnostics, cutting the time taken to run a chromosomal screening from 30 days to 4. He is also working on a chatbot called WiseDiag which has more advanced medical understanding and can be used by patients.

While they are actively seeking business in over 35 foreign countries, for now, the pursuit of American customers is on pause.

“Competition is a good thing… it makes us all stronger,” he says.

“I do not think by limiting the scientific and technological progress of China or other countries, Trump will be able to achieve his goal, I think it is a false premise.

“Information is so developed now, each country has very smart people, it will only force us to have more tech innovation.”

While individuals remain defiant, the trade war will still leave a big hole in China’s economy. Tech firms, however advanced, can’t yet fill that gap.

But the innovation here is rapid, and there is no doubt, it will leave its mark on the world.

Mourners will be able to view the body of Pope Francis lying in state in St Peter’s Basilica from Wednesday, ahead of his funeral this weekend.

Tens of thousands of people are expected to travel to the Vatican over the next three days to pay their respects to the pontiff, who died on Easter Monday at the age of 88.

After his funeral on Saturday morning (9am UK time) there will be a nine-day period of mourning, known as the “novendiali”, after which the secretive meeting – called the conclave – will begin to elect a new pope.

Pope Francis: Follow the latest

The conclave to choose his successor must start between 5 and 10 May.

The first images of his body were released on Tuesday, showing him in red vestments and his bishop’s mitre in a wooden casket.

The Vatican secretary of state was shown praying over him in the chapel of the Domus Santa Marta hotel where he lived and died.

Previous popes were entombed in three coffins: the first made of wood, another of lead and a third, again made of wood. But in 2024, Francis changed the rules and said that only one coffin, a wooden one lined in zinc, should be used.

In a break from tradition, he will be buried in the basilica of Santa Maria Maggiore (St Mary Major), according to his wishes.

Following the pope’s death, from a stroke and heart failure, world leaders have praised his moral leadership and compassion.

On Tuesday, Sir Keir Starmer described him as “a quite remarkable man, and the work and commitment that he put into fairness over so many years, and globally, I think will be a real lasting legacy”.

Sir Keir will join a growing list of dignitaries who will attend the funeral on Saturday, including Prince William, French President Emmanuel Macron, Ireland’s prime minister Micheal Martin, Spain’s King Felipe and Queen Letizia, and Donald Trump.

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Huge numbers have attended the funerals of Pope Francis’s predecessors.

In 2023, around 50,000 people attended the funeral of Benedict XVI, according to the Washington Post. In 2005, around 300,000 went to the funeral of John Paul II.

Once the conclave begins, cardinals vote in secret sessions in the Sistine Chapel.

After voting sessions, the ballots are burned in a special stove. Black smoke indicates that no pope has been elected, while white smoke indicates that the cardinals have chosen the next head of the Catholic Church.

Pope Francis died little more than half an hour after being taken ill, Vatican sources have told Sky News.

Pope Francis woke at 6am on Monday, and was fine for at least an hour, sources said, as they revealed details of the pontiff’s final moments.

Around 7am, the Vatican’s medical unit received an emergency call from his Casa Santa Marta apartment.

Pope latest – Prince William to attend funeral

An urgent transfer to the Gemelli hospital, where he was treated for pneumonia earlier this year, was among the options considered.

A request for an urgent escort from the Vatican was received by Rome police after 7am, sources there said, but, given how quickly his condition worsened, it was cancelled by Vatican officials before 7.35am.

Francis died at the age of 88, a day after making his final public appearance at St Peter’s Square, where he greeted crowds on Easter Sunday, one of the most important days of the Christian calendar.

The Vatican said he died from a stroke that led to a coma and irreversible heart failure.

He is currently lying in state in the Santa Marta Domus in a private viewing for Vatican residents and the papal household.

Francis will be laid to rest Saturday, the Vatican announced on Tuesday, after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects.

The funeral will take place outside, in the square in front of St Peter’s Basilica, and will start with a procession led by a priest carrying a cross, followed by the coffin and ordained clergy.

Cardinal Giovanni Battista Re, the dean of the College of Cardinals, will lead the service. Nine days of mourning begin afterwards.

Unlike his predecessors, Francis will be buried in the Basilica of Santa Maria Maggiore (St Mary Major), as per his final burial wishes, announced on Monday.

The basilica is dedicated to Mary, the Mother of God, and is where Francis traditionally went to pray before and after foreign trips.

He will be the first pope to be buried outside the Vatican in more than a century.

In another change from tradition, he will be buried in a simple wooden casket, forgoing the centuries-old practice of burying the late pope in three interlocking caskets made of cypress, lead, and oak.

Prince William will attend the funeral on behalf of King Charles, Kensington Palace has said.

Cardinals will gather in a conclave to choose his successor afterwards.

Read more:
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Pope Francis: A life in pictures
Francis was a champion of the deprived
Inside Vatican City at moment of high tension

Francis, the first Jesuit and Latin American pontiff, had suffered from a chronic lung disease and had part of a lung removed as a young man.

Health issues plagued him throughout his later life, and he was admitted to Gemelli hospital in Rome on 14 February for a respiratory crisis that developed into double pneumonia. He stayed at the hospital for 38 days before being released.