China's outbound investment to grow at more than 10 percent

Chinese outbound direct investment will continue to grow at more than 10 percent per annum, a report from international accounting firm KPMG showed.

More Chinese companies will make investments overseas, and private-owned enterprises will feature increasingly.

This is because private enterprises are active in many of the new sectors where Chinese companies are investing, and because from the perspective of many overseas countries, there is typically less sensitivity around investments compared to state-owned enterprises.

This is reflected in the higher approval thresholds for private businesses under the China-Australia Free Trade Agreement, the report said.

More investments will be made in North America, Europe and other developed economies, where there are more high-quality targets which can help Chinese companies upgrade, transform and improve competitiveness.

More projects and investments will be undertaken along the 'Belt and Road', as the objectives come to be better understood and the mode of implementing the initiative continues to evolve.

Meanwhile, financial investors will continue to be a feature of the Chinese outbound direct investment landscape, including:

• Insurance companies which, thanks to measures by the China Insurance Regulatory Commission to relax regulatory restrictions on overseas investment activities, and given China's economic slowdown and stock market volatility, will step up efforts to diversify overseas investments, especially into real estate, to improve their overall risk/return profile

• Financial investors – including state-owned financial institutions and funds and multilateral development banks – which will co-invest in, and in some cases, provide advice and support to the Chinese companies undertaking "Belt and Road" projects and investments

• Chinese private equity funds which source and aggregate Chinese and international capital to co-invest in outbound deals by Chinese strategic investors

• Chinese-backed venture capital firms looking for opportunities outside China to strengthen their offerings in the domestic market.