Primavera Capital Brings Together Global Leaders for Annual General Meeting in Hong Kong

On 26 September 2023, Primavera Capital successfully held its Annual General Meeting (AGM) in Hong Kong. The AGM attracted over 150 global leading industry experts, scholars, investment executives, and entrepreneurs, including Nobel Laureate in Economic Sciences Prof. Michael Spence, Ant Group Chairman & CEO Eric Jing, Envision Founder & CEO Zhang Lei, Chairman of Hang Lung Group and ASHKC Ronnie Chan, Deputy Dean of Shanghai Advanced Institute of Finance Ning Zhu, Managing Director and Head of Asia Economic Research of UBS economist Tao Wang, Mercedes-Benz Chaiman & CEO Ola Källenius, and HKEX CEO Nicolas Aguzin among others.

Holding its first in-person AGM following the COVID-19 pandemic, Primavera Capital and its global partners delved into the opportunities and potential impact of the macroeconomic environment, geopolitical landscape, artificial intelligence (AI) technology, and the global energy transition.

One of the key priorities of the AGM was to address investors’ concerns regarding the unprecedented uncertainty and volatility in the Chinese and global economy.

China’s growth potential and resilience against economic headwinds remain strong

In a fireside chat on global economic uncertainty, Dr. Fred Hu and Prof. Michael Spence agreed that China, the United States, and Europe need to face their respective economic challenges head-on. Despite pressures from inflation and interest rate hikes, the US is expected to achieve a soft landing. Although consumer spending and investment in the private sector remain weak and economic recovery has been below market expectations, it is still too early to conclude that China’s prosperous era is over for good. As long as the Chinese government continues to boost market reform policies, enhance consumer and investor confidence, the Chinese economy will remain resilient with great potential for recovery.

When asked about the possibility of China encountering the same economic stagnation and deflation as Japan did in the 1990s, Prof. Spence explained that China today is at a distinctly different stage of economic development than Japan was back then.  As a middle-income economy, China has significant untapped growth potential. As long as catastrophic economic policy mistakes are avoided, “China will not face the ailments of Japan.”

In the roundtable discussion moderated by Primavera Capital Founding Partner Haitao Zhai, economists Ning Zhu and Tao Wang delved into the status quo of the Chinese economy.  They pointed out that debt and real estate-driven growth are no longer sustainable, and that the challenges currently facing China’s economy are the result of a combination of cyclical and structural factors, which consequently impact state-local government fiscal relations, as well as the scale and effectiveness of the overall macroeconomic controls. However, from a long-term perspective, the primary drivers for China’s economic growth are based on a strong labor force, human resources, abundant capital and innovation, as well as robust entrepreneurial spirit.

Substantial growth potential of the Asia Pacific private credit market

Echoing earlier topics, Primavera Capital Head of Private Credit & Special Situations Jeffrey Lau, ABC International General Manager Henry Yuan, AIA Head of Credit Research Anna Cheung, and TTB Partners Co-Founder Teresa Teague shared insights on the current state of play and outlook on Asia’s credit market. The credit market in the region is relatively less mature and smaller in scale relative to the US and Europe, providing significant room for further development. Given current macroeconomic and capital market volatility, private credit offers businesses more flexible and accessible capital sources, while providing institutional investors such as insurance companies and pension funds with better liquidity and risk management options. Similar success previously seen in the US market can be expected for Asia.

Global markets have paid close attention to the challenges of population decline and aging. In the panel discussion on consumption, Primavera Capital Partner Jiaqi Zheng, LBX Pharmacy CEO Vanny Wang, Mead Johnson China Independent Non-Executive Director Christian Nothhaft, and XPeng Vice Chairman and Co-President Brian Gu discussed their respective observations and insights on the consumer sector. Population aging presents important new business opportunities, particularly in the elderly care and healthcare services sectors. Today, Chinese consumers are becoming more rational and sophisticated. By interacting with trendy consumers through higher quality and innovative technology, consumer brands can stimulate demand and drive economic growth.

The role for AI in enhancing financial services and enabling sustainable economic development

During the session on AI, Ant Group Chairman and CEO Eric Jing noted that it is essential for companies to prioritize high-quality digital transformation in today’s global macroeconomic and market environment. By leveraging innovation and technology, companies can create alpha while also delivering greater value to users. Jing emphasized that as the global economic recovery remains challenging, fintech companies can offer valuable support to small and medium-sized enterprises and consumers. Big data technology and mobile internet can significantly reduce the cost of financial services and ensure inclusive financial services, thus promoting the stability and recovery of the real economy, especially for small and micro-scale economies.

HKEX CEO Nicolas Aguzin said in the fintech session that the Asia Pacific region, led by China, is a pivotal force in driving global economic development. Aguzin commented that even amid increasing uncertainties caused by escalating geopolitical tensions, China can sustain its position as a global leader in manufacturing and trade as Chinese entrepreneurs continue to bring mature business models, experiences, and technologies to Southeast Asia and other global markets. Capital plays an increasingly significant role in facilitating business expansions and connecting markets, and Hong Kong undoubtedly remains one of the world’s most important international financial centers.

Dr. Hu, Eric Jing, and Nicolas Aguzin all expressed optimism regarding the importance of AI in the development of the financial industry and capital markets. AI can significantly improve the efficiency of financial services, reduce operational costs, improve risk management and promote inclusive finance, injecting renewed vitality into sustainable economic development.

Key drivers of China’s high-quality economic development: Technological transformation and the renewable energy

While global uncertainties have grown over the years, AI technology transformation and the renewable energy revolution are two investment themes that Primavera Capital has been closely following. Based on this long-term focus, Primavera hosted two AI-related panel discussions and two on achieving net zero emissions during this year’s AGM.

The panels on AI brought together professionals from across the upstream and downstream of the industry and research community. The panelists included SenseTime Founder & CEO Dr. Li Xu, Hisense Broadband Founder & Chairman Dr. Weiping Huang, Accutar Founder & CEO Dr. Jie Fan, Enflame Technology Founder & COO Yalin Zhang, Wind Vice President & Chief Strategy Officer Casey Ge, and Duke University Prof. Yiran Chen. Joined by Primavera Venture Partners Co-heads Dapeng Zhu and Johnny Zou and Primavera Capital Partner Jing Zhang, the group discussed China’s role in AI transformation as well as the impact of AI trends on different applications of the technology, which will become a crucial growth driver for the high-quality development of China’s economy.

The sessions on carbon neutrality were equally captivating. Envision Founder & CEO Zhang Lei, ProLogium Founder & CEO Vincent Yang, Mercedes-Benz Chairman & CEO Ola Kallenius, XPeng Vice President Charles Zhang, Adden Energy co-founder and Harvard University professor Xin Li, and Shanghai Jiaotong University Solar Energy Research Lab Prof. Wenzhong Shen engaged in deep-dive discussions with Dr. Hu and Primavera Capital Founding Partner William Wang respectively. They discussed critical net-zero themes such as the urgency of tackling climate change, the decisive factors of energy transition, the global landscape of the battery sector, the future trajectory of wind, solar and hydrogen power industries, and the development of next-generation technologies like solid-state batteries.

Finally, in a discussion with Chinese and American guests on Sino-US relations and the latest state of geopolitics, Dr. Hu said that climate change is one of the rare issues that the world agrees on despite geopolitical tensions, and is an important area for stabilizing Sino-US relations. Given the importance of global collaboration in science and technology, education, culture and environment protection, Primavera Capital helps create a bridge to the Pacific through its ecosystem of exceptional enterprises and professional investment institutions. This helps support the healthy development of Sino-US relations and global prosperity through deeper understanding and trust.

As a research-oriented investment institution that focuses on the long term, Primavera Capital hopes that by bringing together global investors, entrepreneurs, and related partners at our 2023 AGM, we can minimize and alleviate uncertainty about the China market, strengthen confidence over cycles, and invest together for the future.

During the Summit, Primavera Capital announced that it has become a corporate member of UNICEF’s “Champions for Children” to contribute to creating a sustainable and better future.