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McKinsey – M&A
McKinsey – M&AApr 20, 2026

Why It Matters

The shift signals a more resilient Chinese economy, while AI adoption and strategic family‑business succession will dictate competitive advantage for global investors.

Key Takeaways

  • China pivots from rapid expansion to sustainable, system‑level growth
  • AI adoption stalls at pilot stage due to organizational inertia
  • Knowledge‑management emerges as AI’s biggest use case in China
  • One‑third of family businesses create value during strategic succession

Pulse Analysis

China’s economic narrative is entering a new chapter. After decades of headline‑grabbing GDP growth, policymakers and CEOs now emphasize structural optimization—building resilient supply chains, upgrading technology stacks, and aligning with the global low‑carbon transition. With roughly two‑thirds of large‑scale low‑carbon projects located in China, the country’s ability to integrate sustainability into its growth model will shape energy markets and investment flows worldwide.

Artificial intelligence, once heralded as a quick‑fix catalyst, is confronting a reality check. Many Chinese firms remain trapped in “pilot purgatory,” where proof‑of‑concepts fail to scale because legacy hierarchies resist change. Yet the technology’s most potent application is emerging in knowledge‑management, allowing experience‑rich organizations to codify tacit expertise and accelerate decision‑making. This shift redefines work boundaries, turning AI into a general‑purpose tool rather than a job‑replacer, and sets a benchmark for other emerging markets navigating similar adoption hurdles.

Family‑owned enterprises, which account for a sizable share of China’s private sector, are proving pivotal in the transformation agenda. Research presented at the event shows that when succession is treated as a strategic initiative—rather than a routine handover—about one‑third of these firms generate additional value. This insight highlights a lucrative, yet under‑tapped, investment opportunity for private‑equity and multinational partners seeking stable, long‑term growth partners in China’s evolving economy.

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