Carlyle Seeks Inside Track With China Play

HONG KONG -- Carlyle Group's latest investment in China doesn't involve writing a check.

Instead, the Washington-based private-equity firm is investing in a relationship with a local government that it hopes will turn into a pipeline of deals.

Carlyle has signed a memorandum of understanding, to be announced Wednesday, with the government of Shandong province. Carlyle says the relationship will give it the first look at deals in China's No. 2 province by economic output, after Guangdong. The coastal province of Shandong, south of Beijing, is a powerhouse in industries ranging from chemicals to household appliances to beer.

Private-equity firms ...