Carlyle’s Rubenstein: China Encourages PE More Than Any Country

David Rubenstein, head of the Caryle Group, said that China encourages private equity investments more than any country, including the U.S.

“The government of China encourages people like us to come there,” Rubenstein says. “I feel more welcome there than in the halls of Congress.

Rubenstein, who was speaking at the Dow Jones Private Equity Analyst conference Wednesday, says that China, because of its booming population, will have the world’s biggest economy by 2035. India will likely have the second largest economy while the U.S. will come in third. Brazil will probably rank fourth.

“For the rest of the 21st Century, the U.S. will be the third largest economy behind China and India,” Rubenstein says. The U.S., he says, still has great advantages, including a stable government.

Rubenstein also said investors shouldn’t be afraid of a China bubble. “I don’t think you can be a global investor, involved in private equity and not invest in China…the valuations are not out of control.”

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1 Comment

  • Of course China encourages private equity–it is the only game in town. The fact is that Chinese banks generally do not make cash flow loans to businesses in China. Almost all corporate lending in China is asset-based. Either the banks in china do not understand cash flow credit analysis are simply unwilling to lend on that basis due to other issues. So if you are a typical Chinese business, with $25 million of EBITDA growing at 35% annually (and there are an astounding number of these businesses), private equity is your only choice.

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