Zhang Lei, founder and chairman of Hillhouse Funding, throughout the International Monetary Leaders’ Funding Summit in Hong Kong, China, on Wednesday, Nov. 5, 2025.
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Asia-focused personal fairness managers are turning extra bullish on the world’s second-largest financial system, betting on Beijing’s drive for technological self-sufficiency and fast adoption to ship the subsequent part of development.
Jean Eric Salata, chairman of EQT Asia, mentioned that the strategic priorities outlined in Beijing’s new five-year plan are poised to deepen China’s edge in superior manufacturing, bolster funding in know-how and synthetic intelligence, and enhance consumption.
“I am really bullish on China — and really bullish on Hong Kong because of this,” Salata mentioned on the International Monetary Leaders’ Funding Summit on Wednesday.
He pointed to China’s fast adoption of automated manufacturing as an indication of the nation’s potential to scale its capabilities. “It is mind-blowing,” he mentioned, citing automation at Xiaomi’s electrical car: “it has only a few folks there — and a number of robots.”
Zhang Lei, founder and chairman of Hillhouse Funding, mentioned China’s energy lies in its potential to commercialize synthetic intelligence rapidly. “China will doubtless be the primary to ship rather more on the AI software layers,” he mentioned, citing fast product iterations, decrease prices, open-source fashions, and a large shopper base keen to embrace new applied sciences.
Chinese language tech firms have made huge strides in AI improvement and software this 12 months, lifting a number of Wall Road Banks’ forecasts for the nation’s financial development.
Within the financial improvement plan for the upcoming 5 years, Beijing pledged extra efforts to attain self-reliance in superior applied sciences resembling quantum computing and hydrogen energy, because the nation seeks to bolster its place in its tech rivalry with the U.S.
Fred Hu, chairman and CEO of Primavera Capital, echoed Lei’s sentiment. “I’m very, very assured China will likely be a pacesetter within the AI revolution,” he mentioned, pointing to the nation’s engineering expertise and computing energy.
Hu famous that China’s electrical energy technology capability — at 3.7 terawatts — is greater than 3 times that of the U.S., along with the contemporary capital flowing into energy infrastructure, creating “super promise in AI revolution.”
The optimism alerts a delicate but vital shift for an trade that has spent the previous two years grappling with weak fundraising and geopolitical uncertainty. Western buyers have retreated amid simmering U.S.-China tensions, leaving deal volumes and fund launches at multi-year lows.
Personal fairness companies accomplished simply 93 offers in China as of end-September, in contrast with 279 for all of 2024 and 562 in 2022, in keeping with PitchBook knowledge — placing the market on observe for its weakest 12 months in additional than a decade.
Fundraising has equally declined, with companies elevating solely $3.6 billion as of June, in comparison with $23.6 billion a 12 months earlier. The variety of new PE funds in China has plunged from 144 in 2021 to only 14 this 12 months.
Nonetheless, a rebalancing of funding allocation is underway, as international buyers, closely weighted towards dollar-denominated property, reassess their portfolios, creating a chance for extra capital to move again to Asia, in keeping with EQT’s Salata.
“They’re diversification,” he mentioned, predicting mainland China and Hong Kong to be main beneficiaries of that portfolio reallocation.
