China: Blackstone's full impact

Buy-out firms have eagerly pursued China for the past decade, but the country's legal and regulatory regime often forces firms to be satisfied with minority investments. Blackstone Group's first China investment, in China National BlueStar, is no exception. But Blackstone's investment was not as passive as it seems. Within two months Blackstone joined forces with BlueStar's parent to bid for an Australian chemical maker. The bid marked the first time a private equity firm teamed up with a related Chinese enterprise to clinch an overseas buy-out, but it is unlikely to be the last. Chinese industrial policy provides numerous incentives to Chinese companies to grow domestically and expand overseas. As Chinese enterprises continue to mature, private equity firms will benefit from considering them both as targets and as peers eager to pursue corporate partnership transactions. The shift could have a big effect on the ability of Chinese enterprises to expand...