VIDEO: Jack Lange of Paul Weiss

"With a lot of deals, at the point they come to us the email has a term sheet attached but also a very advanced draft of a prospectus. This indicates that it's one of those deals that was pulled before an IPO and is now looking for PE money," he says.

Lange adds that downturns also temper sellers' valuation expectations, which makes it easier for private equity investors, although there is always a lag between overall economic declines and entrepreneurs becoming willing to compromise.

The areas of interest for private equity in China are unchanged: anything that is perceived as tapping consumption growth and the emerging middle class. Targets range from food supply chains to healthcare to financial services.

At the same time, another longstanding headache also remains - due diligence requirements relating to the US Foreign Corrupt Practices Act (FCPA). "All of the funds are upping their game in terms of FCPA compliance for due diligence and it's something that always leads to tension and misunderstandings with Chinese entrepreneurs," Lange says.

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