Private Capital Update from China

China’s economy has returned to growth in post-COVID-19 recovery, and the government is looking to harness renewed investor sentiment with regulatory updates designed to further open financial markets to international capital.

  • Mainland Chinese regulators have approved updates to the Qualified Foreign Investor (QFI) program, streamlining the application process and expanding the asset classes available to international investors to include convertible bonds, non-performing loans, and mezzanine capital.
  • While several domestic fund managers have raised China-focused mezzanine funds, EMPEA’s data indicates that they comprise only a small fraction of total private capital raised in China, suggesting new opportunities in a competitive landscape.
  • Regulators have also simplified requirements for listing on the Shenzhen ChiNext Exchange, adopting a registration-based IPO system intended to encourage greater transparency and support smaller technology companies.

EMPEA member Clifford Chance shares additional insight into these recent developments and an update on Hong Kong regulations for an upcoming edition of the Legal & Regulatory Bulletin. Access an early copy of the Clifford Chance article by clicking on the “Read Article” button below.