China Investing Via Private Equity Funds
The Chinese government is reviewing private equity applicants for a pilot scheme to allow foreign investors into yuan-denominated China investing for the first time via private equity funds. American funds Blackstone, Carlyle Group and DT Capital Partners have already been granted approval under the new Qualified Foreign Limited Partners (QFLP) program.
In addition to major buyout funds, the Chinese government is interested in attracting foreign capital from venture capital funds as well, with a preference for those that are co-invested by Chinese companies. The government is hoping that foreign capital and expertise can boost China's nascent private equity industry and help in economic restructuring. However, QLFP investors will still be treated as foreign investors, which means they will be subject to numerous restrictions when it comes to investing in Chinese companies.