Private equity appetite for deals in China has cooled considerably in 2022 as the region faces a barrage of economic headwinds ahead of President Xi Jinping's expected reappointment this week.

According to PitchBook data, there have been 573 PE deals in the region—which comprises China, Taiwan and the special administrative regions of Hong Kong and Macao—worth more than $53.5 billion.
   
While 2022 remains one of the busiest years for private equity in the last decade, it still represents a significant slowdown when compared to last year's peak of 726 deals worth about $88.6 billion.

Buyouts have also accounted for a smaller share of overall deal activity. Of the 573 deals recorded so far this year, only 34—just under 6%—are control deals. This represents the smallest share of any year in the past decade.

The drop in activity comes at time when China's economy is slowing down. Earlier this month the International Monetary Fund lowered China's growth forecast for next year to 4.4%, citing its weakening property sector and continued lockdowns as part of its "zero COVID" policy.

Many in the industry will keep an eye on the 20th Communist Party congress, to be held Sunday in Beijing, when Xi will likely be named for an unprecedented third five-year term. It is also expected that this event will provide hints on China's economic plans for the next few years and how it plans to restore growth.

Featured image of Beijing  by anek.soowannaphoom/Shutterstock

This article originally appeared on PitchBook News