The volume and value of outbound mergers and acquisitions by Chinese mainland companies hit a record in the first three quarters of 2016, a report of PricewaterhouseCoopers showed on Thursday.

It said the deal volume reached a record of 671, nearly double that of the full year of 2015. The total value of deals in the first three quarters totaled $164.3 billion, increasing 198.2 percent year on year.

Carol Wu, PwC China transaction services partner, said given the existing global economic climate and domestic competitive landscape, more and more Chinese companies choose overseas M&As for business diversification and technology upgrading.

"Smooth financing channels in capital markets and fast-growing financial investors can be the main reason for the significant increase in the first three quarters," said Wu.

Listed companies accounted for more than 56 percent of the outbound M&A transactions by deal amount in the first three quarters of 2016.

By transaction volume, privately-owned enterprises were still the most active players, clinching 449 M&A deals in the first three quarters. The figure was nearly five times higher than the number for State-owned enterprises.

For the first time, privately-owned enterprises surpassed State-owned enterprises in transaction value, accounting for half of the total over the first three quarters of 2016.

Financial investors became more active with 127 M&A deals made in the first three quarters, doubling the number made over the whole year of 2015.

Among the 10 largest Chinese mainland outbound deals made during the first three quarters, nine targets were located in Europe and North America. Almost half of the top 10 deals were in the high-tech or entertainment industries.

As Chinese enterprises rev up their overseas M&A activity, the changing international tax environment will raise new challenges for their risk control and compliance procedures, the report said.

"For Chinese enterprises, there will be higher requirements placed on tax structuring and planning as well as post-deal risk management and control," said Shou Shuning, PwC tax senior manager.

Shou said when engaging in complex M&A deals, Chinese enterprises need to carefully analyze the transaction structures of both the buyer and seller to isolate the seller's tax risk or obligation through the design and implementation of appropriate transactional steps and legal contracts.