Boost for Chinese Private Equity – Jamil Anderlini and Sundeep Tucker

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China’s leaders often lament the fact that up to 90 per cent of corporate financing in the country still comes from bank – pointing to the need for more efficient markets and a domestic private equity industry.

But with a change in introduced quietly last week, Beijing has moved to address the source of at least some of its angst.

It has established a legal framework that is expected to boost the development of China’s nascent domestic private equity players – with significant consequences for their foreign competitors. Private equity’s profile in China has risen in recent years. Investments in mainland companies in 2006 doubled to $7.3bn (‚Ǩ5.4bn, ¬£3.7bn) from a year earlier, says the Centre for Private Equity Research. Unfortunately – from Beijing’s perspective – the sector has been dominated by foreign giants such as Carlyle Group and Texas Pacific Group. [Full text]

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