An increasing number of Chinese enterprises now prefer a joint venture where they can take a majority stake when expanding overseas, according to international accounting firm KPMG.

"For the majority of companies looking outward, the strategy need not be focused narrowly on mergers and acquisitions (M&A).

"In fact, a joint venture or strategic alliance, where the Chinese partner takes majority ownership, is favored by as many respondents as M&A," said Edwin Fung, partner in charge for markets at KPMG China.

According to KPMG's survey, 48 percent of companies interested in outbound investment said they are likely to embark on an M&A deal where they take majority ownership. Meanwhile, 43 percent will invest abroad in a joint venture where they have a majority stake.

Among Chinese companies turning their back on large-scale acquisitions over the past year, more chose investment in the form of minority stakes or greenfield investments after high-profile takeover bids encountered opposition in target markets.

One executive with a consumer electronics company that has conducted outbound joint ventures, greenfield investments and M&A in order to get closer to target markets, explained that its choice of investment route can be dictated by factors such as customs duties and free trade agreements, in addition to the level of development.

"We will typically only consider an acquisition of an existing manufacturing entity if that jurisdiction has a requisite level of industrialization and a beneficial manufacturing environment," he said. "Where this is not the case, we prefer to construct a facility in cooperation with a local partner."

When asked to cite the specific objectives of their outbound investment strategy, the respondents pointed to achieving geographic growth (59 percent), followed by a wish to build a global profile and reputation (41 percent).

Few said they expanded overseas in response to government directives. More respondents cited purely business reasons such as diversification, moving along the value chain, acquiring intellectual property, cost synergies and the acquisition of brands.

The survey, which received 156 responses from company executives in September and October, revealed that Asia will remain the most popular region for Chinese enterprises' outbound investment over the next three years, cited by 67 percent of respondents, followed by Europe (37 percent) and North America (35 percent).

The developing markets of Africa and South America are also favored, but not to the same extent as Asia and the West.