调查：私募基金有利于中国经济增长

Private equity investment is a relatively new practice in China and has only been practiced for around a decade.

Yet, in recent years, the sector has experienced notable expansion in China amid persistent economic troubles in the US and Europe.

According to the EU Chamber of Commerce in China, over 16 billion US dollars was invested in the form of private equity across China last year.

The figure represents more than 5 percent of the value of global private equity investment, a significant increase from just 1.5 percent in 2007.

Andre Loesekrug-Pietri is in charge of private equity affairs at the EU Chamber of Commerce in China.

While explaining its newly released survey on private equity development in China, he says small and medium sized enterprises have been one of the biggest beneficiaries of this kind of investment.

"The impact of private equity is absolutely massive in those companies under a hundred million Euro or one billion RMB revenues. Those SMEs actually have a growth rate which is triple the ones of equivalent listed firms. I think this is a very important result to show that private equity acts as an accelerator of these firms."

Zhou Hao is a project manager at Bain & Company, a consulting firm which has cooperated with the EU Chamber of Commerce to conduct the survey.

Zhou further elaborates on the benefits private equity brings to small and medium-sized enterprises.

"Private equity firms are professional in terms of making wise investments. When a private equity firm wants to invest in a company, it carries out an overall assessment on the targeted company's performance with the help of consulting firms, accountants and lawyers. So, if a company can pass this strict assessment and receive private equity investment, it will be easier for that company to gain government approval when it wants to go public. So, private equity is of great help to the growth of SMEs."

In a typical private equity investment, an underperforming company is bought by a private equity firm, which aims to turn the business around and sell it for profit at a later date.

In recent years, many industry insiders have called for the expansion of this kind of investment to play a role in solving China's SME credit crunch.

Official figures show SMEs comprise the overwhelming majority of all companies across China and account for about 60 percent of the Chinese economy.

But SMEs, most of which are privately-owned, face long-standing difficulties in raising capital via the stock market and the banking system.

The EU Chamber of Commerce expects private equity investing to undergo continued growth in China over the next several years, and in turn contribute to the growth of China's SMEs.

For CRI, I'm Su Yi.