Blackstone Group LP and TPG Capital are among global firms losing their position as preferred investors in China, the world's second-biggest private-equity market.

Investments by Chinese companies rose to $7.8 billion last year, exceeding for the first time the $7.4 billion poured in by US and other foreign funds, according to the Asian Venture Capital Journal.

China is stepping up efforts to develop home-grown firms, and individuals and institutions are pumping money into a market that favors the yuan over the dollar.