The nation's simplified approval system for outbound direct investment, which has shifted from prior approval toward a registration and filing framework, is a positive step, but corporations need clarification about the new system, a partner at Ernst & Young Global Ltd told China Daily.

"Our clients welcome the move as a positive development to boost outbound investment, but the overall procedures and specific filing requirements need further clarification," said Yew-Poh Mak, who specializes in transaction advisory services in China.

Last year, China made a major leap in its ODI regulatory framework by issuing two documents to simplify the formerly onerous procedures. The documents narrowed the scope of investments that required case-by-case approvals. Projects that require approval by the National Development and Reform Commission, the top economic planner, are now limited to those with an investment of more than $1 billion. Projects involving an investment between $300 million and $1 billion that do not involve "sensitive" sectors or regions only need to be registered with the NDRC. Smaller projects only need to be registered at the provincial level.

Previous rules required case-by-case approval for any investment exceeding $100 million in any sector except energy.

Three regulators are involved in the approval or registration of ODI: The NDRC, the Commerce Ministry and the State Administration of Foreign Exchange.

"In many cases, assets in foreign countries are sold through a bidding process that requires bidders to make decisions in a short time. The approval system put Chinese bidders at great disadvantage as it caused uncertainty," Mak said. So the registration system is a great advance, he said, but it will take time to have the new system implemented, especially at the local level.

Mak made the comment at an event to mark the release of an E&Y report on China's ODI. The report said that from 2011 to 2014, ODI rose at a compound annual growth rate of 16 percent. In 2014, ODI reached $116 billion, which it said was almost equal to inbound foreign direct investment.

The report noted that the share of merger and acquisition transactions in the energy and mining sectors fell to 16 percent of the total in 2014 from 61 percent in 2010. For the technology, media and telecommunications sector, the proportion increased from 6 percent to 21 percent. Agriculture, finance and real estate were also popular M&A sectors.

Analysts at E&Y said that Chinese investors are becoming increasingly sophisticated. Mak said that in the past, overseas M&A deals by some Chinese companies had been executed by their international business departments, which are supposed to operate existing overseas businesses but might not have M&A expertise.

"Now, most companies have set up an overseas M&A department, which recruits experienced professional from investment banks or consultancies," he said.

He said that many his clients now told him they are not only looking for potential M&A targets but also overseas headhunters, because they realized how important local managers would be for their post-merger integration and operation.

The report also noted that the accelerated implementation of the "Belt and Road initiative" will bring "a new wave" of ODI in infrastructure, energy and advanced manufacturing.