With the COVID-19 pandemic coming under better control in China, investments by private equity and venture capital firms in China's technology industry are expected to grow strongly this year, following a sharp rebound in the second half of 2020, a new report from global accounting firm PwC said.

The technology, media and telecommunications industry, known as the TMT space, recorded 2,063 investment deals in the second half of 2020, 74 percent higher from the level of the first six months, according to findings of PwC released Wednesday.

"Driven by the Chinese government's strong support for the TMT industry, particularly technology innovation enterprises, investments in the sector have continued to rise," said Gao Jianbin, the TMT industry leader of PwC, Chinese mainland.

In the next few years, sectors related to the building of "new infrastructure", such as big data centers and industrial chains related the development of the Guangdong-Hong Kong-Macao Greater Bay Area, will be favored by investors, PwC said.

Both are important development trends noted in the 14th Five-Year Plan (2021-25).

In the second half of last year, TMT investments reached $34.69 billion, up 148 percent from the first-half level.

It was the highest level since the second half of 2018, according to data from investment deals that disclosed their financial terms.

The number of large deals rose significantly in the second half of last year, with 55 deals sized over $100 million, up 120 percent from the first six months of last year, PwC said.

In addition, the ongoing development of the registration-based system of the technology-focused STAR Market of the Shanghai Stock Exchange will help fuel the investment growth in the technology sector.

Momentum in investment activities from overseas capital markets also buoyed TMT in China.

The technology sub-segment remained the top spot for investment in the TMT space. Investment rose both in volume and value terms.

Notably, the semiconductor sector continued to attract an influx of investments. In the second half of last year, two investment deals worth more than $2 billion each were clinched by two large Chinese semiconductor companies, PwC said.

The internet and mobile internet industry also showed a significant increase in investment value and volume. The 549 deals recorded in the second half of last year were up by 44 percent from the previous half-year period.

Total investment value reached $11.56 billion, surging 141 percent over the first six months and reaching the highest mark in two years.

The entertainment and media industry rallied in the second half of last year, as a result of effective control of the pandemic in China, but the performance has not fully recovered as some cultural and sports events are not allowed to fully open.

Capital investments continued to largely target expansion-stage and mature firms, due to lower risk appetite among investors.

The investment volume in expansion-stage firms recovered from record lows to hit a historical high in the third quarter of last year, the PwC report said.

"With China's strong support for technology innovation, semiconductors, 5G construction, big data centers, artificial intelligence, the IoT (internet of things) centers, companies in both upstream and downstream of the industry chains have become investment hot spots," said Emily Liu, PwC Chinese mainland assurance partner.

"In addition, the pandemic necessitated investments in specific industries such as online education, e-commerce shopping and other online services," she said.

Meanwhile, in the second half of last year, the number of IPOs jumped 53 percent from the previous period.

With China's ongoing reform in the form of the registration-based system in the capital market, IPOs in the domestic capital market are on course to become more favored by Chinese enterprises.

Hong Kong will remain the most popular destination for Chinese mainland concept stocks seeking secondary listings, PwC said.