China targets foreign trading groups to boost inward investment

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Beijing’s finance regulator is pushing some of the world’s biggest private equity groups to continue investing in China, as officials seek to ease foreign investor concerns over faltering growth and unpredictable policymaking.

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

Executives from KKR, Blackstone, Carlyle and Warburg Pincus attended, as well as Neil Shen, founder of Sequoia Capital’s China unit, which is being spun off and renamed Hongshan.

The symposium was part of a concerted effort by the authorities to re-engage with foreign investors and business. Also on Friday, the commerce ministry convened over 30 representatives of foreign companies, along with the American Chamber of Commerce and its counterparts from the European Union, Japan and South Korea, for a roundtable discussion.

Assistant Commerce Minister Chen Chunjiang said China has placed foreign investment in a “more important position” and aims to create more sustainable expectations for trade.

The Beijing Symposium was the first of its kind between financial officials and groups managing US dollar funds. Their interest in China deals has waned as Washington works on plans to increase screening of US investments in the country and after Beijing cracks down on its booming internet sector and takes more control of foreign listings.

Capital raised by Greater China-based private equity and venture capital funds is set to drop to $36.8 billion in 2022, down from an average of $148.9 billion between 2019 and 2021 and a peak of more than $300 billion raised in 2017, according to data provider Preqin.

The people said no specific encouragement or guidance was provided by the officials during the meeting. Instead, global investment groups were asked to share their vision for China’s economy and encouraged to suggest ways to make it easier to invest in the country. The discussions also included easing the way for Chinese companies to list overseas, the people said.

The flashy aggression comes as investment by several US buyout groups has ground to a halt. After the China Securities Regulatory Commission introduced stricter rules for overseas listings, private equity firms are unsure of how they can eventually exit investments made in China.

China’s economy grew less than 1 percent in the second quarter of this year compared to the previous three months, raising concerns of a vicious cycle of economic slowdown.

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

Attendees also included Chris Sun, China partner at KKR, Michael Hui, head of China private equity at Goldman Sachs, and executives from Singapore state-owned funds Temasek, the Canada Pension Plan Investment Board and HarbourWest.

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