European companies should increasingly look to Asia to sustain growth as pressures build in domestic markets, according to Frank Tang, chief executive of FountainVest Partners.

Speaking to Bloomberg Television at the World Economic Forum in Davos, Tang said Asia offers both a vast source of demand and a powerful engine of innovation, with China playing a central role despite recent economic challenges.

“That’s part of our playbook in helping European companies expand into Asia,” Tang said. “Europe, overall, is facing challenges, and companies should definitely look east.”

Tang said global investor sentiment towards China has improved over the past year after a period in which the market was widely viewed as “uninvestable”. Investors are now reassessing risk and recognising the resilience of high-quality Chinese businesses, he said.

He acknowledged that domestic consumption remains China’s biggest risk, citing weak job creation, lingering stress in the property sector, and broader economic headwinds weighing on consumer confidence. Still, Tang said the scale of China’s domestic market continues to underpin long-term investment opportunities.

Innovation remains a key driver, particularly in life sciences, where Chinese companies are producing globally competitive products. Tang also expressed optimism about Hong Kong’s capital markets, pointing to a strong pipeline of IPOs that could provide exit routes for private equity investors.

The comments underscore how Asia-focused buyout firms are positioning themselves as partners for European companies seeking growth beyond increasingly competitive home markets.

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