EMPEA Insight: China

China’s private equity market has experienced rapid development since the coun­try’s accession to the World Trade Organization in 2001. In the last few years, the number of funds has grown dramatically, from 20 or so China-dedicated funds entering the market in 2005 to at least 150 funds investing there as of June 2008. Cur­rently, China-dedicated funds represent approximately one-third of the Emerging Asian private equity market by number of funds and account for 15% of total capital raised.

China has led the region in deal volume, drawing 33% of investment between 2003 and 2007. Deal volumes rose from US$1.7 billion to US$9.5 billion over that same period, representing 0.29% of China’s GDP as of 2007. China is only now beginning to lose share as Emerging Asia’s top investment destination—slipping to 31% of total volume in 2007 versus 37% in 2003—as growth of India’s private equity industry is gaining momentum.

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