China is looking for foreign acquisition groups on the promotion of domestic investment

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The financial regulator in Beijing has been courting some of the world’s largest private equity groups to keep investing in China, as authorities seek to allay foreign investors’ concerns about faltering growth and unpredictable policymaking.

Fang Xinghai, vice chairman of the China Securities Regulatory Commission, addressed executives from more than 30 global venture capital and private equity firms at a rare seminar on Friday to discuss investing in the world’s second-largest economy, five people familiar with the meeting said.

Executives from KKR, Blackstone, Carlyle and Warburg Pincus attended, as did Neil Shen, founder of Sequoia Capital’s China unit, which has been spun off and renamed HongShan.

The seminar was part of a concerted effort by the authorities to reconnect with foreign investors and entrepreneurs. On Friday, the Commerce Department also summoned more than 30 representatives from foreign companies for a roundtable discussion, along with the US Chamber of Commerce and counterparts from the European Union, Japan and South Korea.

Assistant Minister of Commerce Chen Chunjiang said China has placed foreign investment in a “more important position” and aims to build a more sustainable business outlook.

The Beijing seminar was the first of its kind among financial authorities and groups managing US dollar funds. Their appetite for Chinese deals has waned as Washington works on plans to step up its scrutiny of US investment in the country and after Beijing cracks down on the fast-growing internet sector and takes greater control over foreign listings.

Capital raised by private equity and venture capital funds in China fell to $36.8 billion in 2022, well below the $148.9 billion average between 2019 and 2021 and a peak above $300 billion raised in 2017, according to data provider Preqin.

The people said that during the meeting, the authorities did not provide specific incentives or directions. Instead, global investment groups were asked to share their outlook on the Chinese economy and encouraged to suggest ways to facilitate investment in the country. People said the discussion also covered paving the way for Chinese companies to list overseas.

The witchcraft attack comes as many US buyout groups’ investments have all but ground to a halt. Private equity firms are unsure how they will eventually exit the investments they make in China, after the China Securities Regulatory Commission introduced stricter rules for listing overseas.

The Chinese economy grew by less than 1 percent in the second quarter of this year compared to the previous three months, raising fears of a vicious cycle of economic contraction.

Seventeen investors spoke during the seminar, which lasted about an hour, and some attendees joined in person and others via video link, said a person familiar with the event. The CSRC did not respond to a request for comment on the symposium.

Also in attendance were Chris Sun, China Partner from KKR, Michael Hui, Head of China Private Equity at Goldman Sachs, and executives from Singapore’s state-owned Temasek Fund, Canada Pension Plan Investment Board, and HarbourVest.

People said regional houses like Hillhouse, PAG and IDG also attended. The companies did not comment.

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