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Aileen Chuang

Growth in sovereign investors’ exposure to mainland China in 2025 slowed amid rising political sensitivities, but experts said selective opportunities and closer bilateral ties could support the outlook.
The world’s second-largest economy received US$4.3 billion in investments from sovereign wealth funds, public pension funds and central banks, down 58 per cent from US$10.3 billion in 2024, according to Global SWF, which tracks 792 such state-owned investors.
“Sovereign investment activity has become increasingly politicised, which has forced some Western state-owned investors such as Canadian and European funds to reduce exposures and avoid major deals in China,” Diego Lopez, founder and managing director of the data platform, told the Post.
Diversification away from developed markets had propped up ventures into China in 2024, but an absence of major deals in 2025 disrupted the goal, Lopez said. He added that the drop was surprising, as Chinese sovereign wealth funds continued to grow in size and cement relationships with their counterparts in the Gulf.
In 2025, the biggest inflows came from Singapore’s Temasek, with US$1.3 billion, followed by Abu Dhabi’s Mubadala Investment and the Qatar Investment Authority, according to Lopez.
“Tech geopolitics is a major factor for the 2025 drop in China’s sovereign deal volume from sovereign wealth funds and other state investors,” said Winston Ma, an adjunct professor at New York University School of Law and former head of North America for China Investment Corporation, the country’s sovereign wealth fund.
“As government-affiliated investors, the sovereign wealth funds were inevitably cautious about geopolitical risks, at a time when some Chinese tech start-ups were already on the US sanctions list in their early years,” he said.

Middle Eastern sovereign investors were more willing to invest in Chinese application-layer artificial intelligence companies than in “hard foundation tech” based on the recent wave of initial public offerings (IPOs) in Hong Kong, Ma added. These hard-tech models and chips carried the highest “export-control and national security sensitivities”, he said.
Abu Dhabi Investment Authority (ADIA) invested around US$65 million in the Hong Kong IPO of MiniMax Group, which offers products including an AI agent, audio generation tool MiniMax Audio, multimodal entertainment platform Talkie and visual generation platform Hailuo.
MiniMax’s Chinese rival, Zhipu AI, drew mostly China-focused funds as cornerstone investors in its IPO. Zhipu, founded by professors from China’s Tsinghua University, is backed by and serves mainly domestic institutions. Zhipu and Biren Technology, a Chinese high-performance graphics processing unit designer that listed in Hong Kong earlier this month, are on Washington’s trade blacklist.
AI applications, industrial software and broader digital economy themes were the leading opportunities for global sovereign wealth funds seeking China exposure while aligning with structural digital transformation in their own economies, said Ma.
“China presents significant opportunities in sectors associated with mega trends, including technology, consumer and healthcare,” Lopez said. “We also see Middle East investors increasing collaboration with Chinese counterparts, including Chinese asset managers that have established offices in the Gulf Cooperation Council, which will cement a more consistent deal flow in the years to come.”
Last week, ADIA invested an undisclosed amount in a continuation fund managed by Chinese alternative asset manager CDH Investments. It acted as lead investor in the fund, which was valued at US$770 million at the end of 2024 with a diversified portfolio of mid-to-large-cap assets primarily exposed to China, according to a press release.
“This transaction underscores our continued interest in investing in high-quality assets in China, and demonstrates our ability to invest flexibly and via different deal structures alongside proven partners,” said Hamad Shahwan Aldhaheri, executive director of the private equities department at ADIA.
Last August, ADIA agreed to invest up to US$1.5 billion in GLP, a major logistics and data infrastructure firm with significant operations in China.
China’s real assets, including real estate and infrastructure, attracted the most capital from state-owned investors in 2025, according to Lopez.


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Inflows fall 58 per cent as sovereign wealth funds grow cautious, yet outlook signals selective opportunities ahead, experts say


Inflows fall 58 per cent as sovereign wealth funds grow cautious, yet outlook signals selective opportunities ahead, experts say.


Growth in sovereign investors’ exposure to China slows as political sensitivities rise

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Inflows fall 58 per cent as sovereign wealth funds grow cautious, yet outlook signals selective opportunities ahead, experts say

Inflows fall 58 per cent as sovereign wealth funds grow cautious, yet outlook signals selective opportunities ahead, experts say