With data dripping in for the second quarter of the year, a flurry of reports on the status of private equity in China seems to show mixed results.

Kate Zhao at China Digital Times points to a Financial Times article that is perhaps the most concise overview of the current situation: fundraising for private equity in China is up, but private equity fund managers are having a hard time finding things to spend their money on in China.

It was interesting to see how the news was reported. The Star in Malaysia seems to think the glass is half full, judging from its July 23rd article, Chinese firms embracing private equity funds. The piece highlights the positive contributions private equity firms make to business practices in China. But in neighboring Singapore the glass seemed half empty. The Singapore Straits Times reported in a matter of fact way that private equity investment in China was down by 25% this year over the same period last year - which, of course, is true.

Business Week devoted a fairly in depth article to coverage of private equity funds in China. Private Equity in China Comes of Age puts the situation in global perspective and looks at how the Chinese themselves have embraced the concept of private equity funds in a Communist country. A year ago James Borton talked about the growth of private equity investment in China and mentioned Sequoia Capital in his blog post here, Great Wall Opens to More Equity and Buyout Opportunities. Business Week interviewed one of the managing partners of Sequoia, Neil Shen, for their article; Shen talks about the newly cash-rich individuals in China who now want to use domestic private equity funds there to invest their money. China is growing its own domestic private equity fund industry.

So why the drop off in actual investment if there's all this money sitting around in private equity funds? Regulations: that's a major part of the answer. China is uncomfortable with the growing role of foreign investment and is trying to decide how much private foreign investment to allow.

As time goes on, it is probably just a matter of finding ways to play by the new (and changing) rules. The private equity world obviously will continue to invest in China and it is just a question now of finding opportunities within the rules.