Private equity investment in China is down. On August 27 Business Week reported that PE investment was down over the first seven month of the year by over 42%. The came the Xinhua story on the August drop - with PE down 70% compared to last August.

"There were only three private equity investments in August, all into expanding or profit-making entities, according to the report from China Venture Investment Consulting Group." according to Xinhua.

China's slumping stock market definitely plays a role in the decline. And even with the decline, there's still been over $5 billion in investment. Some 73 companies in China have been on the receiving end of PE investment.

With the pressure of inflation and the uncertainty of what a post-Olympic economy will do, PE investors are likely to hold on to their money for a while longer. But the size of the Chinese market is likely to make investment hard to resist over the long term...