Several months ago, Adam Roseman of ARC China wrote:

“The amount of capital going into private equity in China continues to surge, with over $30 billion in new capital raised in 2011. The number of private equity deals in China is also growing quickly.”

Still, the situation is not as simple as it may seem.

“More money in, however, does not necessarily mean more money will come out through IPOs or other exits. In fact, on the exit side of the ledger, there is no real growth, but instead probably a slight decline, as the number of domestic IPOs in China stays constant and offshore IPOs (most notably in Hong Kong and USA) is trending down. M&A activity, the other main source of exit for PE investors, remains weak in China,” he continued.

Adam Roseman of ARC China explained in a newsletter that “the turnover of the nation’s online high-end brands hit an unprecedented 10.73 billion yuan last year, surging sharply by 68.8% compared wuth 2010’s sum of 6.36 billion yuan, according to findings released by the Internet analysis research company iResearch Inc.

The market will continue to increase at a speed of 30% over the next few years, which mean the turnover is likely to hit 37.24 billion yuan by 2015, said the report.

Revenues generated by the luxury goods’ direct-sales stores on the Internet were not included in the turnover.”

As Premier Jay Weatherill said, “This is a landmark next step in deepening the relationship between South Australia and China. It is crucial that we have a strong relationship with China because it is already our largest export destination and it will soon become the largest economy in the world. China’s growing middle class will be a strong source of demand for our premium food and professional services and its growing urbanisation will continue the demand for our natural resources.”

They met for the first time at a signing in Adelaide on Wednesday that included the premier, the Chinese Ambassador Chen Yuming and senior government and embassy officials.

In a newsletter, Roseman wrote: “Alibaba’s offer to make private its Hong Kong-listed arm Alibaba.com for 13.5 Jong Kong dollars per share, which is on par with the price when the business-to-business portal went public in late 2007, represents a 60.4% premium over the company’s latest 60-day average closing price.

“Analysts expect the privatization to go ahead because of the high premium, fragmented minority shareholders, and the prospect of continuing earnings and share price weakness. Alibaba Group holds 73% of the unit’s shares, and among the largest independent shareholders are Morgan Stanley, Vanguard Group and Capital International.”

“China’s consumer sector is something of a defensive play,” he wrote. “But DBS Group Research claims that the consumer sector provides ‘beauty of both sides.’ To the somewhat poetic DBS analysts consumer companies offer ‘better resilience during the harsh times as well as fruitful returns whenever skies clear again.’

“More practically, the Chinese government favors rebalancing economic growth toward consumption. To that end, it is pursuing policies that increase the minimum wage, limit individual medical costs, accelerate urbanization with new transportation systems, and build millions of units of affordable housing.”

According to O’Neill, China’s growth in the fourth quarter was indeed slowly than that of previous years, but still exceeded the expectations of numerous experts who predicted a “hard landing” for the economy in 2012.

Roseman writes that “China’s economy grew 8.9% in the fourth quarter from a year earlier, the statistics bureau said in Beijing. That exceeded the 8.7% median estimate of 26 economists surveyed by Bloomberg News and is above the 8% that signals a ‘soft landing’ for China, according to SinoPac Financial Holdings Co.”

The article explains that O’Neill believes the overheated property market is China’s main economic problem. Still, China’s policy makers have been able to reduce the issue by closing in on monetary policy.

“We haven’t felt the crisis that they are experiencing in the U.S. and Europe,” said Charlie Dang of Starwood Hotels and Resorts Worldwide. “The domestic economy is still very strong. Generally the second and third tier cities are growing rapidly and that helps our business.”

In general, the Chinese have been boosting the luxury markets recently. According to department store Harvey Nichols, Chinese shoppers increased the store’s December post-tax annual profits by 32%.

Selfridges, another luxury department store in London, has begun accepting payments via China UnionPay cards as a result of the trend.

In a newsletter for ARC China, Adam Roseman quotes Audi’s Peter Schwarzenbauer:”The numbers have exceeded our expectations again.”

Schwarzenbauer added that the company plans to continue developing within China. Last month, Audi shared its plans to build another factory in Guangdong province. The company hopes that the factory will begin operating next year, to manufacture between 150,000-200,000 new cars every year.

Millward Brown and WPP went over the facts and found that 83% of consumers outside of China have not heard of or don’t remember the name of a single Chinese business.

The newsletter writes, according to Adrian Gonzalez, that “that message is significant, given that China wants badly to create its own global brands… Chinese companies like appliance maker Haier and computer electronic company Lenovo that aspire to be global household names will need to better distinguish themselves to become more recognizable to the world’s consumers.”