Private equity firms across Asia are turning increasingly optimistic on China, betting that Beijing’s renewed focus on technology and artificial intelligence will spark the next phase of growth for the world’s second-largest economy, CNBC reports.

At the Global Financial Leaders’ Investment Summit in Hong Kong, Jean Eric Salata, Chairman of EQT Asia, said Beijing’s latest five-year plan will deepen China’s advantage in advanced manufacturing and AI innovation. “I’m actually bullish on China — and very bullish on Hong Kong as a result,” he said, pointing to the country’s rapid automation in electric vehicle production.

Hillhouse Investment founder Zhang Lei said China’s ability to commercialise AI applications quickly sets it apart from other markets. “China will likely be the first to deliver much more on the AI application layers,” he noted, citing the country’s fast product iteration cycles, lower costs, and large consumer base.

Fred Hu, Chairman and CEO of Primavera Capital, highlighted China’s strong infrastructure and energy base as key drivers of long-term growth. “I am very, very confident China will be a leader in the AI revolution,” he said, pointing to the country’s 3.7-terawatt electricity capacity, more than triple that of the US.

The renewed optimism marks a turning point after two years of subdued deal activity and fundraising challenges for Chinese private equity. Only 93 PE transactions closed in China by September 2025, down from 562 in 2022, according to PitchBook. Fundraising has also fallen sharply, but managers expect capital to return as global investors diversify away from US dollar assets.

Salata said this reallocation trend could bring more liquidity back to Asia’s private markets. “They’re looking at diversification,” he said, adding that mainland China and Hong Kong are likely to be major beneficiaries.

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