At the end of May, the National Development and Reform
Commission (NDRC) applied to the State Council for approval to
launch four experimental operations of industrial investment funds,
most of which would be worth billions of yuan. It is not certain
whether or not the operations will be approved, but this act of the
NDRC has opened a dialogue on how to boost the market-oriented
development of a private equity fund (PE) in China.
Currently in China, PE is still in the initial stages of
development, which leads to complications. PE has a lot of room to
grow in a long run because Chinese state-owned and private
enterprises have problems with their management and capital
structure and the efficiency of the Chinese capital market is
comparably low. On the other hand, as a means for raising finances,
PE needs to be supported by an effective law system and fair play
in the market in order to strike a balance between investors and
managers.
How to withdraw governmental interference from PE business and
let the “invisible hand” play a major role may be a long-term
concern for the PE market.
For futher details, please read the full story in Chinse
http://www.caijing.com.cn/newcn/home/headline/2007-07-09/24179.shtml
(China.org.cn July 9, 2007)
