Overseas mergers and acquisitions (M&A) initiated by domestic private companies will be an important part of China's outbound investments, said Wang Chao, Vice Minister of Commerce (MOFCOM), at a forum Thursday held in Xiamen, Fujian Province.

"Though overseas merges and acquisitions are still dominated by State-owned enterprises, private companies have become increasingly active — and they are learning fast," said Wu Zhengxi, an analyst with Ernst & Young.

"It is natural for competitive, private companies to go global to expand their domestic success," Wang Zhile, a researcher with MOFCOM, told the Global Times.

"It is usually easier for private companies to get into foreign markets, since they are not as sensitive as big State-owned companies," said MOFCOM's Wang.

To date, Chinese outbound investors have shown strong interest in the energy, mining and manufacturing industries, while firms have been geographically focusing on Asia, Africa and South America.

According to a recent report from the United Nations, China has jumped to become the No. 2 outbound investor in the world, from last year's No. 5 ranking.

In the first half of this year, China's non-financial investments topped $17.84 billion, up 44 percent year-on-year, with the total assets of China's overseas companies topping $1.2 trillion.

"Tapping into foreign markets will not only bring in more resources, it is also a good move to enlarge the domestic market. Therefore, (overseas investments) will help ease overcapacity pressures on some industries," said Wang.

China should allow domestic investors to invest more freely overseas, said Jesse Wang, executive vice president of China Investment Corporation, speaking at a forum Thursday.

"Currently there is a great opportunity for Chinese investors to go abroad, since global markets are now stabilizing after the financial crisis," said Wu.