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Carlyle signs deal with Chinese province

The Carlyle Group is expected to make significant investments in Shandong Province, China’s second-most productive in terms of economic output.

The Carlyle Group will “enhance trade cooperation and stimulate investment” in Shandong Province, according to a memorandum of understanding signed between the global private equity firm and the Department of Foreign Trade and Economic Cooperation of Shandong Province (SDFTEC), the firm said.

According to the agreement, Carlyle will help develop long-term commercial enterprises in Shandong Province and in exchange, SDFTEC will recommend investment opportunities to the firm.

William Conway, co-founder of The Carlyle Group, said in a statement: “We look forward to creating value, promoting Shandong Province as a favourable investment destination and developing strong and lasting partnerships with companies and industries in Shandong Province.” He added that Carlyle would also help Shandong companies to expand their operations outside China through investments and partnerships.

Shandong is among the richer provinces in China and has the second-highest GDP among all Chinese provinces. Its gross domestic product has grown at an average of 14.3 percent per annum for the last five years.

Lv Zaimo, director general of SDFTEC, said in a statement that cooperation with Carlyle would be elevated “to an even higher and broader level.” He added that Carlyle’s expertise would benefit the province and its communities by bringing in investments, creating jobs and improving the management standards of the local enterprises.

SDFTEC will also help Carlyle in establishing relationships within the province, while Carlyle will provide similar support to the department in the US.

Carlyle has so far made two investments in Shandong. They include a joint venture investment made by portfolio company Veyance to manufacture industrial conveyor belts and an investment in Qingdao Capland Centre, a mixed use development project.

The agreement with Shandong province is expected to help Carlyle in its pursuit of deals in China. Many private equity firms have found it difficult to penetrate the Chinese market owing to sticky government policy and demanding regulations. However, entering into a partnership with a government agency itself to promote investments should pave the way for Carlyle’s ambitions in China.

Carlyle could not be reached for comment.