Liquidity levels crimp PE activity

The nation's private equity activity is likely to remain subdued until there are structural changes that will improve liquidity, according to Cao Heping, an economist at Peking University.

"Since 2012, private equity activity in China has declined, and a major reason is the insufficient supply of liquid assets," said Cao, who is also chief author of a report on the development of the nation's private equity market that was released on Sunday.

Private equity usually means equity investments in non-public companies.