Preface

Private equity was relatively unknown among the Chinese general public in the 1990s and early 2000s. Even if one were to have heard of private equity in China, they often had a poor understanding of it and often mistook private equity simply as an equity investment firm. Early private equity deals did not attract much media attention. It was not until the mid-2000s when foreign private equity firms started to make inroads into the Chinese market that the media started to pay attention to private equity.

The term private equity became more widely known to the general Chinese consciousness only recently, at the height of the economic boom in 2006, when China Investment Corporation (CIC) paid a hefty US$3 billion for a slightly less than 10 percent stake in Blackstone. This was its first investment deal—even before it was officially incorporated—and the Chinese public started to find out what “a Blackstone” is. Foreign private equity firms were aggressively seeking investments in domestic companies and were looked upon as an important source of capital, as the capital markets in China were not well developed yet. The Chinese bond market was undeveloped or still developing, and the stock market was not easily accessible to domestic companies in order to raise funds....