China creates its own Private Equity Funds

The pressures of the west, and the opportunities at home, have forced the government to allow the establishment of these players, for the benefit of the country.

The government has given the go-ahead to four new industry investment funds worth 46 billion yuan.

The State Council approved the funds, which are a type of private equity (PE) fund. The Shanghai Financial Industrial Investment Fund will raise 20 billion yuan, the Guangdong Nuclear Power Industrial Investment Fund and the Shanxi Coal Energy Industrial Investment Fund 10 billion yuan each, and the Sichuan Mianyang High Technology Industrial Investment Fund, six billion yuan.

Chen Zongsheng, chief of the preparatory group for the Bohai Industrial Investment Fund, said problems including a rigid registration and approval system for PE funds and fund managers' lack of experience is hampering the development of PE funds in the country. "The development of PE funds in China will be even faster if these barriers are removed."

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