Zhang Lei, founder and chairman of Hillhouse Investments, attended the Global Financial Leaders Investment Summit in Hong Kong, China on Wednesday, November 5, 2025.
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Asia-focused private equity firms are taking a more bullish stance on China, the world’s second-largest economy, betting on Beijing’s push for self-sufficiency and rapid adoption of technology to enable its next phase of growth.
EQT Asia Chairman Jean-Eric Salata said the strategic priorities outlined in Beijing’s new five-year plan are poised to further deepen China’s lead in advanced manufacturing, step up investment in technology and artificial intelligence, and boost consumption.
“I’m actually bullish on China and, as a result, very bullish on Hong Kong,” Salata said at the Global Financial Leaders Investment Summit on Wednesday.
He noted that China’s rapid adoption of automated manufacturing is a sign of the country’s ability to expand its capabilities. “It’s amazing,” he said, citing the automation of Xiaomi’s electric cars. “There are very few people there and there are a lot of robots.”
Zhang Lei, founder and chairman of Hillhouse Investment, said China’s strength lies in its ability to quickly commercialize artificial intelligence. “China will likely be the first to offer more at the AI application layer,” he said, citing rapid product iterations, low costs, open source models and a large consumer base that is willing to embrace new technology.
Chinese tech companies have made significant strides in the development and application of AI this year, raising several Wall Street banks’ economic growth forecasts for the country.
In its economic development plan for the next five years, the Chinese government has pledged further efforts to achieve self-reliance with advanced technologies such as quantum computing and hydrogen power generation, to strengthen its position in the technological competition with the United States.
Fred Hu, chairman and CEO of Primavera Capital, pointed to the “huge potential” of China’s capital markets, adding that middle-class consumers could build up more retirement savings and make the economy “more sustainable.”
“I am very confident that China will be the leader in the AI revolution,” Hu added, pointing to the country’s engineering talent and computing capabilities.
Hu noted that China’s power generation capacity (3.7 terawatts) is more than three times that of the United States, creating “huge expectations in the AI revolution” in addition to an influx of new capital into power infrastructure.
The optimism signals a subtle but important shift for an industry that has grappled with weak funding and geopolitical uncertainty for the past two years. As tensions between the U.S. and China intensify, Western investors have retreated, leaving trading volumes and fund launches at multi-year lows.
Private equity firms completed just 93 deals in China at the end of September, compared with 279 in all of 2024 and 562 in 2022, according to PitchBook data, putting the market on track for its weakest year in more than a decade.
Funding has similarly declined, with companies raising just $3.6 billion as of June (compared to $23.6 billion a year earlier). The number of new PE funds in China plummeted from 144 in 2021 to just 14 this year.
Still, EQT’s Salata said a rebalancing of investment allocations is underway as global investors focused on dollar-denominated assets reassess their portfolios, creating an opportunity for more money to flow back to Asia.
“They are looking at diversification,” he said, predicting mainland China and Hong Kong would be the main beneficiaries of that portfolio reallocation.
