Heart Capital's Yan Han: Global Innovation Enters "China Time" as International Capital Reshapes the Value Map | VOICE

Not long ago, Yan Han, founding partner of Heart Capital, sat down with National Business Daily for an exclusive interview. As Chinese tech standouts like DeepSeek have gained global recognition, Heart Capital has been fielding a steady stream of outreach and consultation requests from investors and family offices worldwide. "They're eager to understand the latest developments at these Chinese tech companies," Han said. Unlike in the past, these international investors no longer need him to "explain the basics" of Chinese companies' technical capabilities. They've already absorbed it through extensive coverage and in-depth analysis, and clearly recognize the rapid rise of China's technological strength.

By Yao Yanan, National Business Daily

Edited by Li Kai, Zhao Yun

Cover image: Courtesy of interviewee

Global capital is rediscovering "China value."

"2025 could very well become a pivotal turning point for international capital allocation to Chinese assets," Han predicted. Capital from Southeast Asia, which deeply understands China's growth potential; "Belt and Road" partners represented by Middle Eastern countries; and European capital seeking new equilibrium amid geopolitical restructuring — all will embrace Chinese assets with unprecedented enthusiasm. "This isn't merely a short-term investment frenzy. It's the beginning of an era."

International Capital's Compass Swings Toward China

Since the start of the year, as Chinese tech standouts like DeepSeek have made their mark globally, Han has been inundated with outreach and consultation requests from investors and family offices around the world. "They're eager to understand the latest developments at these Chinese tech companies," Han said. Unlike in the past, these international investors no longer need him to "explain the basics" of Chinese companies' technical capabilities. They've already absorbed it through extensive coverage and in-depth analysis, and clearly recognize the rapid rise of China's technological strength.

Southeast Asian investors have been particularly enthusiastic. Han recently hosted a delegation of family office representatives from the region. "They have deeper cultural ties with China and a strong appreciation for Chinese technological innovation and asset value. They literally just booked a flight and came over." He has observed that over the past few months, foreign LPs have noticeably increased their on-the-ground due diligence and in-depth exchanges with Chinese hard tech companies. Face-to-face meetings and deep engagement on each other's turf are already in full swing.

Han previously served as managing director of Lightspeed's U.S. fund and helped establish Lightspeed China, where he managed multiple fund vehicles including Lightspeed China Fund III and IV. In 2022, he founded Heart Capital (Soul Capital), operating both RMB and "non-U.S." dollar funds. His track record includes investments in landmark tech companies such as Full Truck Alliance and Xpeng Motors. In his view, investors from Europe, the Middle East, and Southeast Asia had spent the past few years watching geopolitical developments and China's policy stance on hard tech and other critical sectors. But the situation has shifted markedly this year: "They're done waiting. These international investors have seen clearly that China's tech rise is unstoppable. The performance of Chinese hard tech companies on the global stage has made them realize they need to move faster. These are areas they can't reach independently — they have to partner with China."

In Han's view, DeepSeek is a textbook case: its technical capabilities stand at the global frontier, while its open-source strategy signals openness to collaboration worldwide. He believes 2025 will be a critical inflection point. Capital from Southeast Asia, which deeply understands China's growth potential; "Belt and Road" partners represented by Middle Eastern countries; and European capital seeking new equilibrium amid geopolitical restructuring — all will embrace Chinese assets with unprecedented enthusiasm. "This isn't merely a short-term investment frenzy. It's the beginning of an era." He predicts that over the next 50 years, Chinese tech companies will play an increasingly important role globally — first building deep strength at home, then taking their ecosystems to the world.

Hard Tech Rise and Policy Tailwinds Create "Bottom-Fishing" Opportunity

This shift in international capital's direction is no accident, Han analyzed. Over the past few years, China's venture capital market has undergone a critical transformation. "This adjustment process has been uncomfortable for many industry participants. It's like switching to a new track — you need time to find your rhythm. In the earlier years, everyone was more cautious in investment decisions and project execution. But the situation is completely different now."

In recent conversations with entrepreneurs and investors, he has distinctly felt that market participants have reached consensus: hard tech is the primary direction for future development. Whether entrepreneurs or investment institutions, no one is watching and hesitating as they did in the early stages of this transition. This consensus has made entrepreneurship and investment in hard tech flow much more smoothly than in the past two years.

Behind this transformation, the outstanding performance of Chinese tech companies has provided powerful support. This year, multiple companies represented by DeepSeek have gained broad international recognition for their innovative products and services. Han noted that this has not only given domestic entrepreneurs a tangible view of hard tech's development prospects, but has also demonstrated to international investors the genuine innovative capabilities of Chinese enterprises. This synchronized boost in confidence at home and abroad is opening new space for China-foreign tech investment cooperation.

Furthermore, Han believes that from an investment value perspective, Chinese tech assets have long been undervalued. More and more overseas capital is beginning to recognize that the present may be a window for positioning in Chinese tech assets. The improving policy environment has also created conditions for foreign capital to return. Recently issued policies such as the 2025 Action Plan for Stabilizing Foreign Investment clearly express welcome for foreign capital, offering greater assurances on market access, taxation, and exit mechanisms — effectively addressing international investors' concerns.

"Taken together, the current moment carries special significance," Han said. The clear commitment to hard tech tracks, breakthroughs in Chinese enterprises' technological innovation capabilities, the gradual emergence of valuation advantages, and the continuous release of policy dividends — these factors are generating powerful synergies, accelerating the return of foreign capital to China.

Rooted in China, Yet Connected to the World

Two years ago, Han led more than ten portfolio companies from Heart Capital to the Middle East, spanning artificial intelligence, aerospace, electric vehicles, and other hard tech sectors, for in-depth exchanges with substantial local sovereign wealth funds. This Middle East trip gave him new perspective on how Chinese companies can attract international capital.

"The feedback from Middle Eastern investors was fascinating. They praised this cohort as the most impressive companies they'd seen that year, but also pointed out an interesting phenomenon: Chinese companies tend to accomplish ten and speak of one, while companies from other regions accomplish one and speak of ten, even daring to claim thirty." This stark contrast revealed to Han a distinctive challenge in Chinese companies' internationalization: the low-key, pragmatic spirit forged over five millennia of Chinese civilization has built rock-solid technical capabilities, yet also left Chinese companies overly reserved on the global stage. They possess world-class products but struggle to articulate their commercial value in the "world language" that international capital markets understand. This "accomplish ten, speak of one" trait is precisely what Chinese companies need to overcome to attract international capital.

In his view, this two-way communication capability matters not only for entrepreneurs but for investment institutions as well. "Right now, local investors need to serve as bridges between outstanding Chinese companies and overseas capital, connecting Chinese tech assets with the world, accompanying Chinese companies as they go global more effectively, and giving international investors a true, multi-dimensional picture of Chinese innovation."

On creating opportunities for international capital to truly "land" in China, Han emphasized the importance of firsthand experience. "A considerable portion of overseas investors still understand China through secondhand information. They need to stand on Chinese streets themselves, observe ordinary people's daily lives, experience the ubiquitous digital applications, and see autonomous driving in actual deployment. Based on my experience, every investor who has truly come to China and felt the pulse of this country's development gains an entirely new understanding of Chinese innovation."

Cover image source: Visual China-VCG41182058084

• This article is certified original by "Yuanben," authored by National Business Daily.

Founded in 2022, Heart Capital is an early-stage venture capital fund focused on technology and digitalization in China. The Heart Capital team is primarily composed of Yan Han, founding partner of Lightspeed China, core investors, a chief financial officer, and senior investors from industry backgrounds. The team's past investments include Series A investments in Xpeng Motors (NYSE: XPEV, 09868.HK), Full Truck Alliance (NYSE: YMM), as well as FinVolution (NYSE: FINV), RoboSense (02498.HK), Baichuan, Manman Cold Chain, Fan Deng Reading, World Logistics, Micro-Nano Star, LandSpace, Lanhu, Starfield, and others. Rooted in China with a global outlook, Heart Capital is committed to finding true value in non-consensus. Heart Capital respects the value of "people" and champions the potential of the "heart," looking forward to accompanying more young Chinese entrepreneurs to strengthen China and reach the world.