KKR organized a visit to China with a scale of 5 trillion.
KKR has arrived.
The investment community learned from KKR that recently, KKR's Global Macro and Asset Allocation team visited China, with stops in Beijing and Hong Kong. They visited enterprises in multiple industries such as automotive, robotics, and consumer services.
"We have witnessed firsthand the rapid spread of artificial intelligence and automation in multiple industries." After this trip, Henry H. McVey, a partner at KKR, had a lot of feelings. He saw more signals worthy of long - term attention:
China's supply chain is more resilient than those of other economies. China's artificial intelligence strategy is being rapidly scaled up. Meanwhile, the strengthening of the RMB exchange rate also reflects the growing global interest in RMB asset allocation.
The observations of the KKR team are not accidental. With the full - scale explosion of AI in China, the global spotlight is focusing here.
KKR Team Visits China and Shares Observations
"Win in chaos."
Amid the turbulent world situation, the KKR team concluded its Asian tour. Partner Henry H. McVey borrowed this famous quote from Sun Tzu, an ancient Chinese military strategist, as the opening of his report "Field Visit Observations: China".
"This visit once again confirms that China still has multiple structural advantages and is transforming its first - mover competitive advantage into a more lasting leading position. China still dominates the global manufacturing and supply chain." He wrote in the report.
During this intensive exchange in China, the KKR team formed the following core observations:
China's artificial intelligence strategy is being rapidly scaled up. Nowadays, artificial intelligence has penetrated all aspects of the Chinese economy. The team visited senior executives of enterprises in multiple industries such as automotive, robotics, and consumer services, and the information they conveyed was highly consistent: AI is effectively improving production efficiency.
Different from the US model, China is taking a path that focuses more on the consumer side, emphasizes low - cost and large - scale implementation, rather than blindly pursuing the ultimate breakthrough in model capabilities. KKR's core judgment is that the scale effect will be the key. A few large - scale platform companies, along with some new entrants, are expected to occupy the most favorable value - capture positions in the "winner - takes - all" segments of the technology stack.
However, he also reminded that during the artificial intelligence transformation process, the Chinese labor market is also facing new problems brought about by the structural issue that the number of newly added labor force each year far exceeds the number of actual retirees.
China's supply chain is more resilient than other economies in the region, and advanced manufacturing and robotics have become strategic priorities. Compared with other Asian countries and regions, China can rely more on domestic energy supply and more effectively buffer the impact of external situations.
During this trip, the KKR team spent a lot of time deeply understanding China's advanced manufacturing industry, especially focusing on the robotics field. They visited several leading enterprises in the robotics and automation fields and had exchanges with the management of a global startup company to better understand its broad application prospects in fields such as healthcare, industrial production, and logistics in the next five years.
Henry H. McVey believes that this opportunity is of great significance. More importantly, China's progress in this field is not only cyclical but also of far - reaching strategic significance - it will become the key support for China's next - stage industrial upgrading, digital transformation, and investment growth.
Managing over $744 billion (approximately RMB 5 trillion), KKR has always been active in China's venture capital circle. It has a presence in a series of industry leaders such as Nanfu Battery, Mengniu Dairy, NVC Lighting, ByteDance, GoPlanet Pet, and Ruichen Pet Hospital. In January this year, KKR invested in a mushroom cultivation and fungal biotechnology company based in China, Sylvan, through its US dollar fund and RMB fund, and continued to be its controlling shareholder.
During this visit to China, the KKR team also found a significant trend: the spin - off and restructuring activities of enterprises across China are accelerating, especially against the backdrop of international enterprises re - evaluating their business layouts and capital allocation priorities. This may mean that new opportunity windows are opening.
Stability in the East, Turbulence in the West: Chinese Assets are Being Re - evaluated
As KKR has personally experienced, at this moment, the global spotlight is turning to Chinese technology assets.
From large - scale models to embodied intelligence, from autonomous driving to AI chips, Chinese technology enterprises are shining on the global stage. Especially in the field of large - scale models, China has entered the global first echelon.
Recently, the Stanford Institute for Artificial Intelligence released the latest "2026 AI Index Report". The core conclusion is that the gap between the top large - scale models in China and the US has been "effectively closed", and the performance of the leading models is comparable, showing a parallel - running situation.
On the Arena ranking list, six companies, including Anthropic, xAI, Google, OpenAI from the US, and Alibaba, DeepSeek, ByteDance, Kimi, Zhipu, MiniMax from China, together form the top echelon, and the competition among them is intense.
Different from the past, this round of AI wave emphasizes more on the implementation scenarios and business closed - loops. China's huge consumer market and complete manufacturing system provide an unparalleled testing ground and a fertile soil for large - scale implementation for AI technology. As Goldman Sachs said not long ago: Chinese AI is forming an independent investment main line from global technology stocks, and its potential economic benefits are seriously underestimated. Allocating Chinese AI assets has become a necessary means to hedge against the risks of traditional industries.
Meanwhile, RMB assets are being re - priced by global investors. KKR pointed out that the strengthening of the RMB is not accidental but reflects the growing global interest in RMB asset allocation, which also shows that the outside world increasingly recognizes that China's competitiveness is not based on a weak currency but on a more solid foundation.
With the stabilization of China's macro - fundamentals, the improvement of technological competitiveness, and the continuous advancement of capital market institutional reforms, more and more long - term funds are actively regarding Chinese assets as an indispensable part of diversified asset allocation.
Xing Ziqiang, the chief economist of Morgan Stanley China, summarized this trend as "the inevitable result of global diversified asset allocation". He said at a recent public event that under the macro - pattern of "stability in the East and turbulence in the West", global investors are gradually reducing their dependence on single - dollar assets, and Chinese assets are expected to continue to attract capital inflows during the re - allocation process.
The re - evaluation of Chinese assets is underway.
This article is from the WeChat official account "Investment World" (ID: pedaily2012), written by Zhou Jiali, and published by 36Kr with authorization.