China's outbound merger and acquisition (M&A) activities have reached record level in the first half of the year, though the total value is still a quarter of overall China related M&A activities, according to a report released by PricewaterhouseCoopers' Monday.

PwC's analysis is based on information compiled by ThomsonReuters and ChinaVenture.

Outbound deals neared 100 with combined value of $23.1 billion in the first six months, up 52 percent in terms of number and 48 percent in value year-on-year.

Natural resources deals still account for the majority of all outbound M&A activities as energy-thirsty China needs abundant resources to fuel its economic growth.

Out of the 14 deals recorded, the largest was Sinopec's $4.7 billion acquisition of a 9 percent stake in Synacrude from ConocoPhillips, followed by China Investment Corp's double investment in PennWest Energy, which amounted to $1.2 billion.

Australia remains the main destination for these transactions. However, Chinese companies are investing more in Africa, with nine deals in the first half of the year compared with only two in full year 2009.

In addition to natural resources, Chinese companies are also looking to buy machinery and equipment manufacturers as well as automakers in more mature markets, according to PwC's report.

Major deals include Hui Heng Medical's acquisition of Portola Medical in the US, BYD's acquisition of Ogihara Tatebayashi Factory in Japan and Geely's $1.8 billion acquisition of Volvo in Sweden.

"But, Chinese companies' overseas M&A deals in industries are far from enough. Only 12 deals were reached in the first half of the year," said Wang Xiaogang, transaction service partner with PwC.

Chinese firms have difficulty managing the foreign acquisitions in developed countries because of the high costs resulting from the strong local unions and cultural differences, he said.

The outbound deals, however, only account for about a quarter of the total M&A value.

A total of 1,884 deals with combined value of $76.7 billion were made in the first half, up 26 percent and 31 percent year-on-year respectively.

The number of large deals increased 9 deals each with a value over $1 billion compared with 8 in first half of 2009.

The largest transaction was China Mobile's acquisition of a 20 percent stake in Shanghai Pudong Development Bank for $5.8 billion.

"M&As should grow in the second half," Wang said, citing many firms' large amounts of cash on hand.