German chemical giant BASF announced on Monday that it had broken ground for a polyethylene (PE) plant at its Verbund site in Zhanjiang, Guangdong province.

德国化工巨头巴斯夫周一宣布，其位于广东省湛江市韦尔本德工厂的聚乙烯（PE）工厂已破土动工。

The new plant, with a capacity of 500,000 tons of PE annually and scheduled to start up in 2025, would serve the fast-growing demand in China, it said in a statement.

该公司在一份声明中表示，新工厂的年产能为50万吨PE，计划于2025年启动，将满足中国快速增长的需求。

"China's demand for PE has experienced rapid growth and is going to outpace the rest of the world," said Bir Darbar Mehta, senior vice-president of petrochemicals Asia-Pacific at BASF.

巴斯夫亚太石化高级副总裁Bir Darbar Mehta表示：“中国对PE的需求经历了快速增长，并将超过世界其他地区。”。

"With the groundbreaking ceremony, BASF will enter the PE market in China via a competitive production footprint at its fully integrated production site in Zhanjiang, catering to our customers in the consumer goods, packaging, construction and transportation industries," he said.

他说：“随着奠基仪式的举行，巴斯夫将在其位于湛江的全集成生产基地通过具有竞争力的生产足迹进入中国PE市场，以满足我们在消费品、包装、建筑和运输行业的客户。”。

Carpet squares made with polyethylene, also called PE — a material widely used in products including clear food wrap, bottles and shopping bags — is one of the new products the company has been producing in recent years.

聚乙烯制成的地毯方块，也称为PE，是该公司近年来生产的新产品之一。PE是一种广泛用于透明食品包装、瓶子和购物袋等产品的材料。

The PE carpet squares, mainly used in office buildings, had been manufactured primarily in the US before Haima succeeded in developing its own production techniques after more than 500 experiments, Liu said.

刘说，在海马经过500多次实验成功开发出自己的生产技术之前，主要用于办公楼的PE地毯方块主要在美国生产。

"Domestic demand for PE carpet squares couldn't be fulfilled due to COVID-19, which affected transportation, so we started to study and develop the PE carpet in 2020," he said.

他说：“由于新冠肺炎影响了交通，国内对PE地毯广场的需求无法满足，因此我们在2020年开始研究和开发PE地毯。”。

By working with universities and scientific research centers including Dalian University of Technology for nearly two years, the company finally mastered techniques for manufacturing PE carpet squares.

通过与大连理工大学等高校和科研中心近两年的合作，该公司终于掌握了PE地毯方块的制造技术。

After conducting 400 experiments, the company was able to produce PE carpet squares up to international standards, Liu said, but the company wanted its products to be better, so it continued to upgrade its carpet to make it more comfortable.

刘说，经过400次实验，该公司能够生产出符合国际标准的PE地毯方块，但该公司希望自己的产品更好，因此继续升级地毯，使其更舒适。

Production started on the PE carpet squares in June 2022.

PE地毯广场于2022年6月开始生产。

"The PE carpet has no irritating odors and it can be recycled, making the product popular in the market," he said.

他说：“这种PE地毯没有刺激性气味，可以回收利用，使其在市场上很受欢迎。”。

The PE firm announced on July 5 that the acquisition was completed with the privatization of CAR Inc.

该PE公司于7月5日宣布，随着CAR股份有限公司的私有化，收购已经完成。

Co-led by OrbiMed and Redview Capital, the round also attracted investors including Valliance; Travis Global Ltd, which is an affiliate of Orchid Asia; Summer Capital; and Yingke PE.

Other investors participating in the round include Oriza PE Fund Management, Legend Star and Eastern Bell Venture Capital, the company said in a statement.

This new vehicle, named Cathay Smart Energy Fund, will focus investments on cutting-edge energy technologies and new business models of the Chinese energy sector, according to the PE firm.

Tang added that CreditEase's Fund of Funds has already invested in IDG Capital's PE funds and these two companies also launched an angle investor Fund of Funds early this year.

Private equity or PE investment volume and value fell by 24 percent and 34 percent, respectively, compared with the second half of 2021, and the decline in value was across all sectors, with the exception of energy and power, the report said.

PE deal volumes remained strong in high tech, industrials and healthcare, which is in line with various government initiatives in these sectors.

Data from the Asset Management Association of China showed, as of November 2021, there were 804 PE companies registered in the city, managing 4,829 PE products worth more than 826.7 billion yuan.

The volume of venture capital investments hit an all-time high in 2021, surging 46 percent on a yearly basis, and the Shenzhen Stock Exchange and the technology-focused STAR Market of the Shanghai Stock Exchange were still the most popular listing destinations for PE investors, according to PwC.

In addition, PE and financial sponsors will continue to play an important role in all aspects of M&As in China.

"Overall, we expect PE investment activities in 2022 to be on a par with or just slightly below the record levels of 2021," Liu said.

Last year, PE investment accounted for more than half of the total value of M&A in China for the first time, and the value of deals remained at very high levels in high-tech, industrial and consumer goods sectors, said Effie Yang, PwC China transaction service partner.

More PE companies participated in the mega-deals related to e-commerce, logistics, and ESG, Yang said, adding in terms of deal volume, PE activities increased slightly from 2020, with technology, healthcare and industrial segments being the top three most popular sectors in 2021.

This could go hand-in-hand with the longer IPO process and regulatory uncertainty brought by pre-listing scrutiny and cool some foreign VC and PE funds' interest in Chinese startups, especially as overseas listings serve as the prevailing exit channel for foreign funds, Luo said.

PE activity remained strong but fell from the record levels reached in the second half of 2020.

"The PE industry is well placed to respond to the demand for equity capital, the overall liquidity is still high and we expect activity levels to remain strong in the second half of 2021.

There were 1,413 VC investments and 1,369 PE investments.

While the global economy remains constrained by the pandemic, China has demonstrated its unparalleled advantages, which have created opportunities for the country's VC and PE market, said Li Shimo, founder of Shanghai-based Chengwei Capital.

With the authorities' vigorous support for technological innovation, the country's economy witnessing robust recovery, as well as the adoption of registration-based IPO system across the board, PE and VC investments in China's TMT industry will show vitality again, Susan Deng, PwC Chinese mainland assurance partner.

Seven months earlier, the company received investment from Yingke PE.

Investments into the ESG space have already seen rapid growth in China, with evidence that ESG-focused PE investments have higher financial returns, the report said.

Li identified clean energy, renewable energy and wastewater treatment as some of the potential areas of interests for PE investments.

On a broader scale, the PE sector enjoyed a strong recovery last year, with China's total deal value rising to $97 billion, up 42 percent from 2019 and 22 percent higher than the previous five-year average.

"Offline-wise, admittedly, it looks to still take a long while for the industry to pick up," said Fan Chen, chairman of Beijing-based Uni-Quantum PE, who was an investor and vice-chairman of the board of Xi Bei Restaurants from 2009 to 2016.

However, he said the mud-and ash-covered playground is unsafe and inconvenient to the children during their PE class.

"They (the students) can watch basketball live at any time after school, and also have PE class under any weather," said Michelle Beltran, deputy headmaster of the Baliwet Elementary School.

Beltran said that according to the school's curriculum, there are two PE classes in a week.

"But the children now are eager to have PE classes each day," she said.

Cushman and Wakefield said Shanghai ranked eighth among the most popular destinations for global investment in 2018, drawing more than $10 billion of capital from several PE funds in the past few years.

The report said the volume and value of PE and VC investment in the TMT industry declined more than 20 percent in the first half of this year compared with the second half of 2021, due to the resurgence of domestic COVID-19 cases coupled with escalating geopolitical tensions.

With the authorities' vigorous support for frontier fields such as artificial intelligence, quantum information and integrated circuits, and an accelerated push to bolster the construction of 5G networks, industrial internet and big data centers, PE and VC investments in China's TMT industry will show vitality again, said Walter Zhang, assurance markets leader for PwC North China.

The low PE ratio of Chinese equities points to opportunities that can hardly be found in other markets, whether developed or emerging, Lin said.

By allowing for industry recognition and meeting expectations based on supervisory history over the past few years, the new regulation will serve as a fundamental mechanism to complete comprehensive supervision over China's PE industry, said the CSRC.

Based on the new regulation, the CSRC will further optimize its management of PE funds' fundraising, investment, capital operations and information disclosure practices.

Jiao Jinhong, CSRC's chief lawyer, said that 10 years of preparations have been made for the new regulation, which provides detailed measures throughout the PE lifecycle of fundraising, investment, management and exit.

The new regulation clearly states that the PE industry should serve the real economy and promote technological innovation.

As China heads for high-quality economic growth, the PE sector should seek substantial development amid regulations to nurture more "unicorn "companies with technological specialties, he said.

In China, the PE sector is further divided into private securities investment funds and private equity funds.

Venture capital is also part of PE funds.

Combined with the registration-based initial public offering mechanism, which has been promoted across the A-share market earlier this year, the new regulation will help PE funds expand exit channels and elevate investment enthusiasm.

As of May, there were 22,000 PE fund managers registered with the Asset Management Association of China, with 153,000 funds under management, totaling 21 trillion yuan ($2.9 trillion).

It has clearly stated that the PE industry should serve the real economy and promote technology innovation.

Serving as a fundamental regulation to complete the supervision over China's PE industry, the new regulation will facilitate the high-quality development of the industry, according to the explanation provided by China Securities Regulatory Commission on its official website on Sunday.

As of May 2023, there were 22,000 PE fund managers registered with the Asset Management Association of China, with 153,000 funds under management, totaling 21 trillion yuan ($2.9 trillion).

Data from PE market tracker Simuwang showed that its monitored PEs have invested 79.65 percent of their capital in stocks in May, the highest monthly level so far this year.

Analysts from PE firm StaRock Investment wrote in a report that both investor sentiment and A-share indexes may have also approached a near-term nadir.

The two funds, of 5.51 billion yuan each, will be co-operated with China Merchants Capital and Goldstone Investment, a PE arm of China Merchants Group and CITIC Securities.

Advanced manufacturing, healthcare and biomedicine attracted the most PE investment in China last year, according to market consultancy Bain & Co.

A China PE investment report released by technology and innovation media outlet TMTPost in mid-February described 2022 as the "first year of the RMB fund era".

Affirma Capital, the independent PE owned and operated by Standard Chartered Private Equity, was reportedly targeting its first RMB fund of 2 billion yuan, according to Reuters.

L Catterton, the PE firm backed by luxury conglomerate LVMH, said in October it had reached the first close of its debut yuan fund targeting 2 billion yuan, focusing on the consumer sector.

The total funds raised by PE firms focusing on investment in China was slashed by 80 percent year-on-year in 2022 to drop below $23 billion, which was the lowest level since 2010, according to alternative assets research company Preqin Ltd.

The company said that it is one of the most comprehensive players in the PE market — covering small investments in the early stages to large investments in the upper-end of the mid-market, managing 34.1 billion euros ($37.2 billion) assets globally.

David Yang, head of Eurazeo China, said that as a European-rooted PE firm, Eurazeo, with its extensive network, rich resources and investment expertise, can partner with "invisible champions" in Europe and grow together by expanding their international footprint.

The latest approval given to private equity or PE firms to invest in the property sector in China will help funnel more capital into real estate companies and ensure the stability of the entire industry, experts said on Tuesday.

The China Securities Regulatory Commission, the country's top securities watchdog, announced a pilot program on Monday to allow PE funds to invest in residential housing, including projects under construction, affordable homes and rental projects.

PE investment in commercial real estate and infrastructure projects is also allowed under the trial program.

Real estate PE investment funds are already important financial products in mature markets overseas, the CSRC explained in the announcement.

The PE sector will thus play a bigger role in serving the real economy, the CSRC said.

Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution, said cash raised from the real estate PE investment funds is expected to flow mainly into stalled residential projects, rental properties and commercial real estate projects.

Analysts from Haitong Securities said the pilot program addresses the CSRC's optimized measures released in late November to support the property industry, which specified that PE firms should be given a role to play.

In the medium to long term, the pilot PE investment funds program, together with the mutual funds' real estate investment trust or REIT scheme that started in 2021, will help lay a development path in the property industry that will connect investment, financing, management and investor exits, said Zhang Quanguo, joint chief analyst for real estate and property management at CITIC Securities.

Under this program, investment shares of private equities (PE) and venture capital firms can be transferred.

Secondary funds, which are widely seen in the PE industry, usually have a portfolio of interests acquired from initial partnership subscribers.

The valuation of the US stock market is above the average recorded over the past decade even after the latest adjustment, as its PE ratio is around 20 times at present, Li said.

The report comes as PE deal value peaked at a decade-long high last year of $128 billion, though there was a drop in the second half of 2021 per the report released on Tuesday.

In the United States, VC and PE investors exit investments in innovative companies by having them acquired in roughly nine out of 10 cases.

The China Securities Regulatory Commission, the country's securities watchdog, approved on Monday the launch of a pilot program under which investment shares of PE and VC firms can be transferred.

The pilot program will be experimented at the Shanghai Equity Exchange in the hope of expanding exit channels for PE and VC firms.

The regional equity market can be better integrated with PE and VC firms in the pilot program so that the circulation of finance among industries will be smoother, said the CSRC.

In a guideline released on July 15 to build Pudong into a pioneer of the country's socialist modernization, the central authorities said that a pilot platform to transfer PE and VC firms' shares in their invested companies should be set up based on past experiences in order to promote the development of a secondary market for such shares.

PE and VC firms, which usually aim to finance startups and SMEs with long-term growth potential, can exit via IPOs as well as mergers and acquisitions, which include secondary sale purchases.

Zhong Yan, managing director of Silicon Valley Bank Capital China, said the secondary market for PE and VC firms' shares in their invested companies is quite small in China at present.

But demand for trading in PE and VC firms' shares in the secondary market is strong.

Experts from Shanghai-based Gopher Asset Management said the secondary market for PE firms' shares will certainly emerge after the expansion of PE and VC firms.

Based on experiences in overseas markets, the need to transfer investment shares will emerge when PE and VC firms mature.

The penetration rate of the secondary market for PE firms' shares is said to be 3 percent in overseas markets.

Given the current 7 trillion yuan ($1 trillion) value of the Chinese PE and VC industry, the country's secondary market for PE firms' shares could be around an estimated 200 billion yuan.

Official data showed that PE and VC funds' accumulative investments in the equity of non-listed companies have exceeded 8 trillion yuan ($1.25 trillion) so far, functioning as a key financing channel for non-listed innovative enterprises.

But it is still far from the average 57-times PE ratio reached by ChiNext companies as of Friday.

Shenzhen Rongzhi Investment Consultant, a tracker of the Chinese PE industry, said at least 20 PEs have seen their value amounting to over 10 billion yuan ($1.6 billion) so far this year.

The country's fundraising also intensified in the first quarter as VC and PE firms launched 1,803 new funds over the period, which rose a significant 76 percent year-on-year and 10 percent compared with the previous quarter.

During the process, VC and PE firms, which are mostly market-oriented, can give full play to their driving role," said Zhang Lei, founder of global investment firm Hillhouse Capital.

"VC and PE firms have a relatively higher risk tolerance.

CVSource, an information service provider, said that in the first quarter, combined VC and PE investment into projects related to carbon neutrality in China hit over $4.5 billion, which was much higher than that of other sectors.

PE and VC firms have also funded such companies.

From this perspective, PE firms' funding, IPOs and secondary floats can prove very useful.

PE deal values hit record highs in industrials, technology, financial services, consumer and healthcare sectors.

In volume terms, PE firms were also active in high-tech, industrials and consumer sectors.