Analysis of Private Equity Investment in China

The Private Equity has a long history in West Country, but it appears very late in China. Following the highly grows of Chinese economic, it is surprised to see the Private Equity grows so fast and the size expands largely. The Private Equity gains a lot in promoting technology innovation, financing enterprise, accelerating the growth of the economy and providing jobs and so forth. However, the Private Equity hasn't gotten enough attention, comparing to the deep effect it caused, such as the law and regulation for it is so scarce and the research on it is so less. In the process of its appearance, the Private Equity has experienced the introduce stage, accommodation stage and fast growth stage, which is tightly linking to the Chinese Economics, and which is important to the healthy growth of Chinese Economic. So the importance and meaning are very great on the research of the Private Equity in China. Firstly, the thesis identifies the concept of the Private Equity and its special characters. meanwhile, the history of Private Equity in the West country is mentioned., also include that when the Private Equity development in China. Then, the article shows the difference between West country and China from a series of factors, such as financial system development, regulatory policy, transaction type, human resource, and entity level. After that, it starts the research with the view of the Private Equity itself. As we all know, the Private Equity can be divided into three stages, as the financing stage, invest stage and the exiting stage. The thesis studies the risk on there three stage, pointing out the risk factors. The article creatively points out same risk factors, such as Information Disadvantage Risk, Investor Risk and so on. The paper also creatively introduces the same risk factors from other subjects, such as Risk of Incorrect Acceptance, Risk of Incorrect Rejection and so forth. Then it naturally gives a suggestion of the controlling of the risk under the current situation in China. At the last, the article gives an actual case that happened in China, demonstrating the reasonableness of the risk factors the paper gave; also the risk controlling the thesis suggested is in practice. Via the research of the risk on the Private Equity's three stages, we know the actual existing of the risk and control the risk as the thesis suggested, to ensure the healthy development of the Private Equity, or maybe can give same elicitation for legislating or setting up regulations on the Private Equity of the nation.