China equity has been going gangbusters lately, with the iShares FTSE China ( FXI) exchange traded fund up 25.3 percent in the last six months, clobbering the MSCI Emerging Markets benchmark.
And as a result of these market risks, equity values in China have declined.
This could possibly be just another storm in a teacup regarding the future of China equity.
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Despite a structurally imbalanced economy and a largely inefficient equity market, China still possesses tremendous potential.
So the only way to get them is buying directly into the more active China equity market.
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Also, A shares won't stay cheap forever, says Jerry Lou, a China equity strategist at Morgan Stanley.
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After beating the MSCI Emerging Markets Index for the past six months, China equity outperformance will unlikely last the year.
The latest trend among private equity investors in China to set up yuan-denominated funds seems to have the classic makings of a bubble.
Agnes Deng, fund manager at the Greater China Fund (GCH) says the U.S. downgrade will be systematic risk for Hong Kong China equity markets this week.
Zhou's proposal has received extensive support from other countries, according to political analyst Gao, who's also a key player in the private equity business in China.
The trend continued to gain momentum in the first quarter of 2010, with 14 RMB funds among a total of 17 new private equity funds in China.
Two CICC alumni, Wu Shangzhi and Fang Fenglei , run what are described as the most important private-equity firms in China CDH Investments and Hopu Investment Management, respectively.
When converted, the bonds would become equity in Bear Stearns that would amount to 10% to 20% of its total equity, making China Construction Bank its largest shareholder, according to the Journal's account.
Policy interventions and regulations around the listing and approval process ensured that the equity market in China were, and still are, heavily slanted toward monopolistic SOEs, and light on competitive private (meaning, non-state-owned) sectors, the true growth drivers.
No wonder that China's equity markets, for all their impressive size, financed less than 2% of total investment in China last year.
In terms of the availability of private equity, nearly every international private equity firm is combing China for investment opportunities.
Investors in the share offering included CIC International, Boyu Capital and CITIC Capital, as well as CDB Capital, the equity investment arm of China Development Bank.
Kaplan said that housing bubble and financial sector concerns have made China a cheap equity play.
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But, within emerging market equity funds, pessimism about China is getting trumped by overall optimism on Asia.
It's a common strategy in the way private equity is practiced in both China and the Gulf.
Morgan Stanley's Jonathan Garner, chief Asian and Emerging Market Equity Strategist, concurs that China is experiencing a V-shaped recovery.
In recent years billions have flooded into the more-than-5, 000 private-equity firms that focus on China (see chart), but Hony has emerged as the top dog.
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Major indexes started lower following a rout in China's equity markets.
China's OTC equity market remains extremely small, lacks market-makers and isn't open to many investors, especially retail investors.
When China invests it secures an equity share of production on terms comparable to other co-owners (mainly the host country).
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As the biggest overall consumer of energy in the world, no one is in any doubt that China has to step up equity deals, both for security of supply, and more importantly, to hedge price risk exposure in future.
The Bloomberg China-U.S. Equity Index, which tracks the hotly traded Chinese ADRs, recently advanced 1.1% in New York to hit a 9 day high of 105.70.
High inflation has been a downer for equity markets in Brazil, Russia, India and China this year.
The Obama campaign has in turn claimed that Mr Romney outsourced jobs to China during his time as a private equity chief.
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