Matthews Asia portfolio manager Andrew Mattock is making a case that could reshape how global investors think about artificial intelligence exposure: China may be the missing piece. In a market where AI enthusiasm has largely been priced through U.S. megacap technology names, Mattock's strategy points to the world's second-largest economy as an underappreciated source of both direct and indirect AI opportunity.
The argument is not that China will replace the U.S. as the center of AI innovation. Rather, it is that investors seeking broader exposure to the theme may be too narrowly focused on the obvious winners. China remains deeply relevant to the AI trade through its hardware manufacturing base, semiconductor supply chains, cloud infrastructure buildout, industrial automation and a large domestic market that can absorb and scale new technologies quickly. For portfolio managers looking beyond the most crowded names, that combination can matter.
China's AI Linkages
Mattock's framing reflects a growing recognition that AI is not just a software story. It is also a story about chips, power systems, data centers, robotics, networking equipment and the industrial companies that enable deployment at scale. China sits across several of those layers. Even with ongoing geopolitical restrictions and tighter U.S. export controls on advanced semiconductors, Chinese companies remain central to the production, assembly and commercialization chain that supports global AI infrastructure.
That makes the investment case more nuanced than a simple bet on Chinese internet platforms. The opportunity set can include firms tied to electronics manufacturing, automation, cloud services, electric power demand and industrial upgrading. In other words, investors who want AI exposure but are wary of paying peak valuations for a concentrated group of U.S. stocks may find China offers a different route into the same structural theme.
The timing is notable. Global investors have spent much of the past two years crowding into AI beneficiaries in the United States, driving sharp gains in a small number of large-cap names and raising questions about concentration risk. At the same time, Chinese equities have often traded at a discount, weighed down by domestic growth concerns, regulatory uncertainty and strained relations with Washington. That gap is precisely what makes Mattock's thesis stand out: if AI is a multi-year capex and productivity cycle, then the market may be undervaluing the parts of the ecosystem that sit outside Silicon Valley.
Beyond The Obvious Winners
For central bank watchers and macro investors, the broader implication is that AI is becoming a cross-border industrial policy story as much as a technology story. The United States may dominate frontier model development, but China's scale in manufacturing and infrastructure means it can still capture meaningful economic value from the rollout of AI, even under constraints. That matters for earnings, capital spending and sector rotation.
Mattock's strategy also speaks to a more disciplined style of AI investing. Instead of chasing headline-grabbing model developers alone, it emphasizes the ecosystem: the suppliers, enablers and domestic champions that benefit as AI adoption spreads through factories, logistics networks, consumer services and enterprise software. In China, that ecosystem is broad, and in some areas, still underpriced relative to the scale of the opportunity.
There are, of course, risks. China's policy environment remains less predictable than that of developed markets, and investors must contend with geopolitical friction, export restrictions and uneven domestic demand. But those risks are part of the reason the valuation case exists. For some global allocators, the question is no longer whether China is investable in the abstract, but whether excluding it leaves AI exposure incomplete.
The Allocation Question
The deeper message from Mattock's approach is that AI exposure should not be treated as a single-country trade. The market has already rewarded the most visible U.S. beneficiaries, but the next phase may depend on identifying where the infrastructure is built, where components are made and where adoption can scale fastest. China, despite its challenges, remains one of the few places that checks all three boxes.
That is why the thesis is resonating. For investors trying to diversify AI exposure without abandoning the theme, China may indeed be the missing piece. The opportunity is not without complexity, but in a market increasingly sensitive to valuation and concentration risk, complexity may be exactly where the next layer of returns is found.