Mubadala Plans to Expand China Investments, Sees Opportunities in Four Key Sectors

By Qingting Zheng | 21st Century Business Herald

ABU DHABI’S sovereign investor Mubadala Investment Company plans to expand its investments in China over the coming years, with life sciences, energy and the energy transition, infrastructure and technology among its priority sectors, its chief executive told 21st Century Business Herald.

Khaldoon Al Mubarak said Mubadala’s approach to China had evolved from a relatively broad investment strategy to a more selective focus on larger transactions in sectors and companies where it has strong conviction.

Al Mubarak said he expects Mubadala's investment activity in China to continue growing by at least 15%–20% annually, as the sovereign investor doubles its local resources and pursues larger, high-conviction investments, reflecting its confidence in China's long-term growth prospects despite global economic uncertainty.

“We’re not short-term investors. We’re not investors who come in and exit. We are long-term investors,” Al Mubarak said in an exclusive interview in Beijing on October 12.

Mubadala has been investing in China since 2015 and says it has deployed more than $20 billion in the country. Its China strategy has evolved from participation in a $10 billion UAE–China joint investment fund to direct investments and larger stakes in selected companies. Its recent investment in Luckin Coffee reflects its interest in China’s consumer sector and technology-enabled businesses. The overall Luckin transaction was valued at approximately $1 billion.

Mubadala manages $385 billion in assets across six continents. Its assets under management rose 17 percent in 2025, while capital deployment increased 20 percent to AED143 billion ($39 billion). Its annualised returns over five and ten years were 10.7 percent and 10.3 percent, respectively. Based in Abu Dhabi, the fund combines a global investment mandate with a role in supporting the emirate’s economic diversification.

Al Mubarak said China’s appeal extended beyond its large consumer market to its entrepreneurial culture, talent pool and ability to build globally competitive businesses. As Mubadala’s understanding of the market and its local partnerships deepened, the fund had shifted towards larger transactions.

“Since 2015, we’ve never taken any money out of China. We’ve only increased our investment,” he said.

Mubadala is also looking to expand its participation in China’s public and capital markets, areas where it had previously taken a more cautious approach.

As the UAE President’s Special Envoy to China, a role he has held since 2018, Al Mubarak said the two countries were well positioned to deepen economic cooperation as global companies reassess supply chains and seek greater resilience.

He highlighted the complementary roles China and the UAE could play in global supply chains. With its logistics infrastructure and access to markets across the Middle East, Europe and Africa, the UAE could serve as a regional platform for Chinese companies expanding overseas. China, meanwhile, remains an important destination for UAE investment capital and a key market for its energy exports.

Despite geopolitical tensions and an increasingly unpredictable global economy, Al Mubarak said he remained confident in China’s growth prospects and industrial strategy.

“The world is complex, but it is navigable if you are wise, thoughtful and considered,” he said.

Mubadala’s China Playbook: Conviction at Scale

21ST CENTURY: You have invested in China and built relationships here for more than a decade. How has Mubadala's approach evolved, and what have you personally learned about China as an investor?

Al Mubarak: I would say I've had the privilege of being part of this special UAE–China relationship as it has grown and evolved.

I've had the opportunity, over the years that I've been traveling to China, to see firsthand this economic miracle. The Chinese economic miracle over the last 50 years is clear to everyone. Our own economic miracle mirrors, to a certain extent, China's experience over these 50 years, just as our 50 years in the UAE have unfolded alongside China's development. So you can immediately see the correlation.

From a personal perspective, I've been traveling here for at least the last 25 years, and I've been coming on a very, very regular basis. I've been building great relationships and partnerships over these years, and with that, I've learned a lot.

I've learned a lot because when you come to China and meet the people here, you begin to understand China. And when you understand the people and the culture, you're able to invest wisely and thoughtfully.

21ST CENTURY: Let's zoom in on one of Mubadala's more recent investments in China. Mubadala announced an investment in Luckin Coffee in September as part of a transaction valued at approximately $1 billion. What made the company attractive?

Al Mubarak: As a sovereign fund from the UAE, owned by the government of Abu Dhabi, we've been one of the most active sovereign funds in the world over the last 10 to 15 years. We've grown a lot over this period, and we've spent a lot of time focusing on the market here in China.

Since 2015, we've really earmarked China as a primary investment market, where we needed to spend a lot of time and put the right resources in place.

Over these last 11 years, we've substantially increased our investment every year, with a 20% CAGR, give or take.

Right now, we've reached considerable scale in this market. Particularly over the last couple of years, what we've been doing is being very selective in picking larger-scale transactions with high conviction.

We've moved from a more diversified, index-type approach to a more focused approach, concentrating on the sectors and areas we like and the right companies. We spend a lot of time studying these companies before investing with higher conviction and, therefore, making a greater commitment.

The investment in Luckin Coffee is one such example. It's a company we've spent a lot of time learning about and understanding, conducting due diligence on its business and growth. We've developed high conviction in the company and where it's headed.

It's exactly the type of business we like: consumer-oriented, technology-based, with a great management team, very strong performance on the ground, a highly competitive position and a solid growth story going forward.

From that perspective, it represented a great opportunity and the right type of opportunity. We've invested about $1 billion in that particular transaction. It's a big-ticket investment, but it's the size and scale of investment we're likely to pursue more often in China.

We like these sorts of transactions where we can achieve scale because, ultimately, for an institution like Mubadala, we spend as much energy and focus on a $1 billion transaction as we do on a $50 million transaction.

21ST CENTURY: If we look at the bigger picture, beyond China's consumption growth, what characteristics make a Chinese company attractive to Mubadala today?

Al Mubarak: In China, you have an incredible entrepreneurial spirit. What we've found in China is that there are great companies with talented entrepreneurs and founders, built on the right platforms and finding a lot of growth opportunities.

We've seen this in different sectors, from life sciences to industry, manufacturing, technology, energy and the energy transition, including electric vehicles. Across all these sectors, we've seen tremendous companies.

What we've done is identify, in every sector we like, the companies most likely to succeed and become highly competitive. We've tried to identify them and find the right opportunities to invest in them.

Some are privately held and remain in the private equity space, while others are in the public markets. At the beginning of our journey, we used to focus much more on private equity. As we've grown and scaled up, we've increasingly looked to the public markets as well, aiming to achieve the right mix of private equity and public-market exposure.

I think one of the things we find most attractive about China is the competitive spirit. Chinese companies are extremely competitive, and the talent pool available here is extraordinary.

Many of these companies can compete not only in the domestic market but also internationally, where they have the ability to expand abroad and remain highly competitive in whatever markets they enter.

China and the UAE: Trade, Investment, and Supply Chain Complementarity

21ST CENTURY: Your investment experience also provides an interesting perspective on the broader economic relationship between China and the UAE. The two countries have developed a strong economic relationship in recent years. Where do you see the biggest new opportunities for the two countries?

Al Mubarak: I think it starts with the point I made earlier: we see a lot of similarities. The incredible miracle of the Chinese economy over the last 50 years is something we've experienced on a much smaller scale in the UAE. We look at China and that incredible miracle as both inspirational and aspirational.

In that sense, I think the relationship has been built on that foundation. When our people—the people here in China and the people in the UAE—interact, the conversation is much easier. We're both forward-looking and positive in nature. As people, we like to trade and build relationships.

Our cultures are not too different. We're very similar in terms of our values and our appreciation of important values such as family, hospitality, trust and respect. These are things where you can immediately see alignment.

I think the way both countries are growing has naturally brought us closer together.

You can see that in the trade relationship between China and the UAE, which has been an exceptional story, particularly over the last 20 years of consistent growth. Bilateral trade has reached over $100 billion in 2025 and will be approaching $200 billion by 2030. I have no doubt these numbers will be reached, given the trajectory and the continued growth.

In our experience investing here, we've found that we're very welcome as investors, at a time when investment trends around the world are changing.

For us, China is the world's second-largest economy and has the world's second-largest public markets. It's an economy that continues to grow at a consistent rate, with opportunities in the sectors we like.

21ST CENTURY: As the UAE President's Special Envoy to China since 2018, you have a perspective that extends beyond investment. How do you see China's role in Abu Dhabi's long-term economic development and in global industrial supply chains?

Al Mubarak: I see this as a continuously growing partnership, built on a solid foundation. In any strong structure, the foundation is key. What we have in the bilateral relationship between China and the UAE is a strong foundation. Therefore, growing from that foundation is much easier because it's so solid.

Today, when you look at trends around the world, it's all about resilience and having the right supply chains. I think this is where I see very interesting complementarity between China and the UAE.

The UAE presents itself as a very interesting entry point to the Middle East, Africa and Europe. Within a radius of almost 3,000 kilometers around us, there are many economies. We have the best infrastructure in the region across the board, including logistics infrastructure, airports, airlines, ports, transportation and energy infrastructure.

We have an open market and a clear entry point for businesses to build, grow and set up operations with a great deal of ease, while gaining access to the surrounding region. The UAE is very well positioned, as it always has been, as a conduit for trade across that 3,000-kilometer radius.

I think this complementarity allows us to do two things.

First, it makes the UAE very attractive to many great Chinese companies looking to expand internationally and use the UAE as a platform for growth across the region, within a competitive and highly conducive ecosystem and environment.

Second, the UAE is a net exporter of capital and energy. We invest all around the world, exporting both our energy resources and our capital resources in a thoughtful and intelligent way.

China welcomes foreign direct investment and is a growing economy. It therefore makes sense for us to look forward to building a substantial investment base here in China as we continue to deploy our capital thoughtfully.

At the same time, as a significant exporter of energy, China is a very important partner for us in the energy business.

As always, the best partnerships are those built on a win-win basis, with the right attitude and commitment to each other. Having been involved in this relationship for so many years, I think that's what I see. The success we've achieved has driven the outcomes we see in the relationship today.

China’s 15th Five-Year Plan and Mubadala’s Strategic Alignment

21ST CENTURY: Let's talk about your observations on China's economic transformation and industrial development. China's 15th Five-Year Plan places significant emphasis on innovation, technology and advanced manufacturing. How will it shape Mubadala's approach?

Al Mubarak: It aligns almost perfectly with what we see as the future. Advanced manufacturing, technology and new forms of energy are all foundational areas for the future and where we see growth.

China's focus, as reflected in its Five-Year Plan, is clear. One of the things we admire most about China is the clarity of its vision and strategy.

When you have a clear strategy and vision, along with the ability to execute—which China has—and the ability to execute at scale, it creates a clearer window for us as investors.

We can then see how the companies—and, in this case, the economy as a whole—are growing in that direction.

This allows us to decide whether it matches our strategy, which I think it does. That strategy is completely aligned with what we see as the logical areas for growth.

Then, when we look more closely at the substance of the plan, the opportunities are there. It's about identifying them and finding the right way and the right entry point to invest.

21ST CENTURY: What most excites you about China's next generation of entrepreneurs and technology companies—and what do you look for as an investor?

Al Mubarak: First of all, we look at the sectors and define areas such as energy, infrastructure, health care and life sciences, as well as technology. These are all areas that are very interesting to us.

When we look at China's population of over 1.4 billion, one of the largest populations in the world, we see a huge consumer market. We look for the right platforms that can reach these consumers, both domestically and internationally. So we look at these kinds of market indicators.

When we look at companies and their founders, it's important for us to meet the founders, developers, CEOs and other key individuals leading these businesses.

At the end of the day, one way to put it is that investing is like a marriage. You have to understand each other, and then you have to commit to each other. Particularly for a sovereign fund like Mubadala, we're not short-term investors. We're not investors who come in and exit. We are long-term investors. We're here for the long journey.

Looking at our investments since 2015, we've never taken any money out of China. We've only increased our investment because our conviction has grown and has been reinforced by performance.

I think we've done very well investing in China, and I think we'll continue to do well because we have the right people and the right teams. More importantly, we see the entrepreneurial spirit and talent here.

What distinguishes China today from many places around the world, I think, is its incredible entrepreneurial spirit, its extraordinary talent pool, and its ability to combine entrepreneurship and talent to create new businesses and companies, while also growing existing large companies and platforms to a huge scale, both in China and around the world.

Mubadala: Delivering Returns While Building Abu Dhabi’s Future

21ST CENTURY: I really like this comparison that investing is like marriage. Now, let's talk about Mubadala's overall investment mandate and performance. Mubadala is both a global investor and a builder of strategic industries. How do you balance commercial returns with Abu Dhabi's broader economic diversification goals when setting investment priorities?

Al Mubarak: I think these two objectives work very well together. If you're able to strike the right balance, you can achieve both objectives in a very constructive way. This is what we've tried to do, and I think we've been successful in the UAE.

When you look at our portfolio, almost 25% of it is in the UAE. We've been able to build, develop, grow and invest in incredible businesses.

Given our scale, a larger volume of our investments is made internationally rather than locally, because of the size of our portfolio. But in the UAE, we've been able to generate the right returns. Looking at our numbers, we've consistently achieved double-digit returns as an entire group over both five-year and ten-year periods, as well as over longer periods.

When I look at the UAE component of our overall portfolio, it has also consistently achieved double-digit returns. On both fronts, we've been able to do this while creating great businesses in the UAE, including industrial, financial services and life sciences businesses. These businesses are large-scale and highly competitive, create the right jobs, and generate the right economic activity within the UAE, while remaining globally competitive and becoming global champions.

We've been able to achieve this in industries such as aluminum, where we have one of the largest aluminum platforms in the world. It's a global champion, highly competitive and very profitable for us.

21ST CENTURY: In general, how do you assess Mubadala's contribution to the development of Abu Dhabi's non-oil economy?

Al Mubarak: I think the UAE as a whole has been on a wonderful diversification journey. More than 40 or 50 years ago, it was predominantly an oil and gas economy, with energy resources representing over 70% of GDP.

Today, the energy sector accounts for less than 30% of GDP. That diversification strategy is reflected in our own journey. As we've invested in the UAE over the years, we've followed that trajectory, investing in sectors that diversify the economy away from oil and gas.

You can see this today. The UAE remains one of the world's largest producers of oil and gas, yet the sector contributes less than 30% of GDP. I think this is a great reflection of a very good strategy—one that is diversified, consistent and successful, while maintaining growth for the country and the economy.

Mubadala has contributed to that diversification. In 2025, our UAE portfolio supported 98,000 jobs, directly and indirectly, and our investments accounted for 5.7% of Abu Dhabi's non-oil GDP.

We have a very good economy in the UAE. It's diverse and resilient, which makes it attractive for us to continue investing in, even in the most difficult times.

Over the last 10 years, there have been multiple extraordinary situations. If you go back to 2008, there was the financial crisis; in 2020, the pandemic; and in 2026, regional instability and war. All these challenges were exceptional events that would have affected any major economy or country.

But if you look at the UAE's performance throughout each of these crises, it has always been able to recover quickly and perform at a high level. We're seeing that again today. Despite a very challenging year in 2026, our economy has performed very well.

21ST CENTURY: Mubadala reported 17% growth in assets under management and a 20% increase in investment deployment in 2025, alongside annualized returns of 10.7% over five years and 10.3% over ten years. What have been the key drivers of these returns, and which investment decisions or asset classes have contributed most significantly?

Al Mubarak: I think we've made very strong, conviction-led decisions over the years in selecting the sectors we want to focus on. We've also maintained a highly diversified global investment approach.

That strategy of diversified investing, the great partnerships we've built over the years, and the right sectors we've selected and focused on have resulted in the returns you've just outlined for the last five and ten years.

This also gives me a high level of confidence in the future.

More importantly, can we continue to deliver double-digit returns consistently at these levels? And can we improve on them? I believe we can.

Don't get me wrong: these are not easy targets, particularly for a fund of our size to achieve consistently. However, what gives me a high level of confidence is that we've been able to do so year in and year out.

When I look at the future, I believe we're in the right places and the right markets. We have the right teams and the right strategy. We need to continue executing, and I have a high level of confidence in our teams' ability to keep executing and outperforming.

The numbers we've achieved in the past are good numbers, I think, but I believe we can do better. I'm pushing everyone on our teams at Mubadala to do better and better, while building value, creating lasting returns and remaining consistent.

Looking Ahead: More Investment in China

21ST CENTURY: Looking ahead, the global investment environment is becoming increasingly complex, with geopolitical tensions and a more fragmented global economy. Against this backdrop, what sustains your conviction in China over the next decade or two?

Al Mubarak: When I look at China, I consider several factors.

First, I look at growth. I believe in the Chinese economy's growth trajectory in the short to medium term.

Second, I look at the population. In terms of population size alone, China has one of the largest consumer markets in the world.

Third, I look at the strategy, particularly the government's Five-Year Plan. I think the sectors identified in that strategy are spot on.

These are the factors I think one should consider in a world that is changing significantly.

It's not easy to see the future clearly, particularly given the technological evolution and massive disruption taking place with AI and the global transition underway.

This requires us, as investors, to be nimble. We have to be able to navigate sometimes uncharted waters and periods of uncertainty. I think we can see the light at the end of the tunnel, but the road to that light is not as clear. We have to be able to navigate that road and sometimes pivot.

I think this is the art of investing in the world we live in right now. It's not simple; it's complex. But it is navigable if you're wise, thoughtful and considered.

21ST CENTURY: To be more specific, looking ahead to the next three to five years, which sectors in China are most likely to attract additional investment from Mubadala?

Al Mubarak: I would identify four areas: life sciences; energy and the energy transition across that entire spectrum; infrastructure; and technology.

21ST CENTURY: Do you expect China to account for a larger share of Mubadala's investment activity? If you cannot disclose a specific allocation target, could you share how your investment priorities in China may evolve?

Al Mubarak: I would say the following. We started in 2015 from a lower base. We've been able to consistently increase our investment by 15% to 20% every year.

So we've been on a higher trajectory every year for the last 11 years. I would expect at least the same trajectory going forward, so we will continue to increase our investment.

We're doubling our existing resources here in Beijing. We're expanding the scope of our investment activities into sectors such as public markets and capital markets, areas from which we had previously tended to stay away but on which we're now more focused.

So you'll see us doing a lot more, and you should expect us to continue growing by at least 15% to 20%.