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| Signing Ceremony of the Cooperation between Chongqing and 7 QFLPs |
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(Translation of official Central Government announcement)
http://www.gov.cn/gzdt/2011-05/25/content_1870495.htm |
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| The first batch of Qualified Foreign Limited Partnerships (¡§QFLPs¡¨) landed on Chongqing officially. On May 24th, 2011, 7 QFLPs including Infinity Group signed cooperation agreement resepectively with the Chongqing Foreign Affairs Office (¡§CQFAO¡¨) to set up Private Equity (PE) funds in Chongqing amounting to USD 8.7 billion. |
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| Mr. Huang Qifan, Mayor of Chongqing municipal government, Mr. Iddo Moed, Deputy ambassador of the Israeli Embassy in China, respective executives from Infinity Group, Jinshang Investment, Pacific Mainland Investment, Blue Ridge Capital, Chongqing Aktis Investment Fund Management Co. Ltd., Mingly China Growth Fund, and First-wall Street Capital participated in the signing ceremony. |
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| According to Mayor Huang Qifan, the landing of the 7 QFLPs¡¦ in Chongqing is a milestone of Chongqing¡¦s financial industry. Chongqing government will take up an active role in exploring effective ways to facilitate foreign exchange settlement with the support from relevant national authorities, so as to enable these QFLPs to convert foreign currencies into Renminbi for onshore investments.
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| ¡§As an important financing channel, PE fund, though not fully developed at present, is a ¡¥timely rain¡¦ to the PRC¡¦s economy. PE investment of the United States is approximately 0.7% of the US¡¦s GDP last year, while PE investment of the European Union is 0.6% of the EU¡¦s GDP. However, PE investment in China amounts to only 0.1% of China¡¦s GDP. This shows that PE investment in China has lots of room for improvement. Similar to the flourishing stock market which only took off 20 years ago, we believe PE Funds will also develop rapidly and will play a major role in the economic growth.¡¨ said Mayor Huang Qifan.
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| ¡§On the other hand, PE is favoured by a majority of investors due to its decades of excellent investment performance. Over the past 10 years, both one-year and three-year growth rates of PE funds are 10% higher than the Dow Jones Index and the S&P Index. These high growth rates reflect the value of PE. Similarly, this feature is also shown in emerging Asian countries. For example, all the stocks picked by PE funds normally have better growth than other stocks. The share price and price-earnings ratio will double in general. This is because PE funds demonstrate specialization, resource utilization and allocation, and the principle of survival of the fittest.¡¨ said Mayor Huang Qifan.
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| According to Mayor Huang, it is particularly important to develop PE Funds currently. Bank loans are insufficient to support the local economic development under the backdrop of monetary tightening. Apart from bank loans, non-bank institutions and other central financing channels, PE funds are another important financing system for state-owned companies, private sectors, SMEs, and also social and market projects. The landing of the 7 QFLPs¡¦ in Chongqing will facilitate the local financial market through PE fund financing.
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| ¡§Chongqing¡¦s goal is to create a high-land for inland PE funds in the future. Apart from relaxing regulations on the investment direction and forms of cooperation of PEs, Chongqing will also explore more favorable policies to provide a good developing environment for PE funds¡¨, said Mayor Huang Qifan.
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| ¡§Today¡¦s signing ceremony is a milestone of Chongqing¡¦s financial market infrastructure. The event will take the urbanization of Chongqing to a new era. As the greenest municipality and hub of the financial, industrial, shipping and technological sectors of southwest China, Chongqing¡¦s development in the recent years demonstrated to the world its attractive and immeasurable prospect for further development. As the most important pole of economic growth of China West, Chongqing has accomplished major achievements. By making full use of all historical opportunities, Chongqing adjusted the economic structure, enhanced the infrastructures, reformed the financial sector, and expanded its open policy. The all-around socio-economic development is widely recognized¡¨, said Mr. Amir Gal-Or, CEO of Infinity Group and spokesman for the 7 QFLPs.
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| ¡§As representative of the first QFLPs in Chongqing, we have decided to set up the fund in Chongqing not only because we value the city¡¦s rapid growth and investment value, but also because of the high efficiency of government administration. These factors enhanced our determination and confidence to develop along with Chongqing¡¨, said Mr. Amir Gal-Or.
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| This first batch of PE funds will base in Chongqing and will mainly invest in the consumption, high-end manufacturing, pharmaceutical chemistry, new materials, IT, cloud computing industries etc. It is expected that the total capital of PE funds will amount to USD8.7 billion. In which USD 1.7 billion will be in place this year, actual contribution to projects is targeted to be USD500 million.
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Chongqing QFLP Pilot Programme –
Signing Ceremony
Seated, far right: Teik Seng Cheah, Chairman of Aktis Chongqing
Seated, 4th from right: Luo Guang, Director-General of Chongqing Financial Affairs Office
Standing, 5th from left: Huang Qifan, Mayor of Chongqing Municipal Government |
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