PE firms have plenty of opportunities in China in 2015

Shan Xiangshuang, chairman of the Beijing Private Equity Association

Private equity firms will have an active and profitable 2015, based on the rapid development of the Internet, the blossoming of startup companies and the benefits of China's financial reforms, the chairman of the Beijing Private Equity Association said.

"The Chinese PE market will be presented with three huge opportunities. I believe that 2015 will be a bull year for the market, and that situation will persist for a decade," said Shan Xiangshuang.

Shan said the rapid development of the Internet, the mobile Internet and big data will have a significant effect on the strategies and investments of the Chinese PE sector.

"The traditional profit pattern in the sector is based on information and resource asymmetry, but the Internet is decreasing asymmetry and creating an open and shared environment," said Shan.

"However, private equity firms can take advantage of the strong intermediary, the Internet, to develop businesses with a new structure."

The nation's mobile Internet sector was worth about $51.6 billion in the third quarter of 2014, up 93.4 percent year-on-year, according to consultancy iResearch Group.

Shan said that reforms in the capital markets last year were deep. He cited developments such as the establishment of the National Equities Exchange and Quotations, an over-the-counter market that is China's third national equity exchange, as well as plans for a registration-only system for initial public offerings.

These moves "can do much to improve the liquidity and profitability of PE investment," he said.

"The third driver is the growing wave of innovation and startups," he said.

Since the 18th CPC National Congress in 2012 confirmed that China would pursue an innovation-driven strategy, a series of measures have been taken to support innovation.