Rubenstein: China 'at the epicentre' of private equity

China's private equity market will make a much greater contribution to growth of the global economy than US private equity has in the past, according to the co-founder of The Carlyle Group.

China is “by far the most attractive emerging market in the world” and “probably the most attractive market in the world”, David Rubenstein, co-founder and managing director of The Carlyle Group, told the audience at private equity conference in Beijing Monday.

Speaking at the second annual Beijing Global Private Equity Forum, Rubenstein compared private equity in China to private equity in the US in the 1960s and 1970s and told the audience China's private equity industry had a unique chance to participate in the growth of the Chinese economy.

China is now at the epicentre of the private equity world.

David Rubenstein

“Private equity helped the US economy, but didn't play a major role in helping the economy become the largest in the world. But the Chinese private equity industry can and will play a much bigger role than the US private equity industry did in developing the economy,” he said.

“In my lifetime, China will be the largest economy in the world and I suppose the Chinese private equity market will become the largest private equity market in the world,” he stated, adding: “China is now at the epicentre of the private equity world.”

Currently, private equity investment in China represents only 0.2 percent of GDP, compared to 1.8 percent in India and 3.5 percent in the US.

Like many other global private equity firms, Carlyle is in the process of establishing an RMB fund under the Shanghai Pudong New Area pilot policy announced in June. The policy allows foreign firms to establish Chinese subsidiaries and has been acted on by firms including Blackstone Group, Macquarie Group, and First Eastern Investment. No details of Carlyle's fundraising have been disclosed.

In May 2008, Carlyle signed a memorandum of understanding with the Shandong Provincal Government. The MOU said that Carlyle would “dedicate resources, capital and expertise to the region to promote and develop sustainable, long-term commercial enterprises” in return for proactive government recommendations on investment opportunities, according to a statement at the time.