From Financial Times:
China’s leaders often lament the fact that up to 90 per cent of corporate financing in the country still comes from bank loans – pointing to the need for more efficient capital markets and a domestic private equity industry.
But with a change in regulations 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 (‚Ç¨5.4bn, ¬£3.7bn) from a year earlier, says the Centre for Asia 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]