The perfect partner is just an ocean away

The best prospects lie in "intellectualized and automatic sectors", Cai says.

Over the past three years private companies have emerged as one of the major players in overseas mergers and acquisitions, Xu says.

"Before 2013 few private companies came to us for advice on overseas mergers and acquisitions, but now such business almost equals that of State-owned enterprises."

Private companies are more nimble in their decision making, and they will continue to be an increasingly important force in overseas mergers and acquisitions, Xu says, citing the insurance company Anbang, the investment group Fosun and the conglomerate Dalian Wanda as examples. All three have been highly active acquirers internationally.

"You really need three to five years to gauge whether one of these overseas deals is successful because integrating two corporate entities can be a fraught task."

Of all the overseas deals Xu has studied, those of the automotive components maker Wanxiang Group in the United States have been among the most impressive, he says.

"The size of Wanxiang's M&A deals has not been that big, and the price has been relatively reasonable."

Since its first acquisition of a solar energy plant in the US in 1996, Wanxiang has bought 28 plants in the US, producing auto spare parts for GM, Ford and Daimler Chrysler.

Ni Ping, president of Wanxiang Group's US company, says the way existing staff and those of a newly acquired company are integrated can determine whether the acquisition succeeds or not. Having local staff is particularly important for Chinese companies, he says. Wanxiang employs more than 6,500 people in the US.

Despite the impressive growth of Chinese enterprises' overseas mergers and acquisitions, the proportion of Chinese assets overseas remains minuscule compared with those of developed markets. Europe, the United States and Japan each have about 40 percent of their business assets overseas, and the figure for China is just 8 percent, Morning Whistle says.

"A lack of skilled people is one of the biggest problems," Xu says. "In recent years Chinese companies have taken on more international M&A talent to manage mergers and acquisitions process, but it will take a bit longer to get other professionals like engineers good at communicating with their counterparts in the acquired foreign company to get up to speed."

According to a survey by the University of International Business and Economics in Beijing, Chinese companies lack translation and other language skills needed to expand overseas.

These can still be counted as the early days of Chinese companies making transnational acquisitions, says Shen Danyang, a spokesman for the Ministry of Commerce.

Chinese overseas investment accounts for just 3.4 percent of the world's total, he says, the figure for the US being 24.4 percent. Britain, France, Germany and Japan are also ahead of China on this count, he says.

Shi Jing contributed to this story.

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