China vows to help private companies invest abroad by giving them financial and tax support, according to a joint statement released Wednesday.

Domestic banks will be encouraged to provide short-term loans, export credit and collateral loans to private companies' overseas assets, said the statement, which was issued by 13 government agencies, including the Ministry of Finance.

Under the new policy, private companies will be able to buy or sell foreign currency directly without having to go through approval procedures, and they can also reduce or be spared paying taxes domestically to avoid double taxation.

"This shows that yuan convertibility under the capital account is being expedited," Sun Fei, director of the Chinese Enterprises Overseas Development Center, told the Global Times.

The new policy will help channel China's $3.2 trillion in foreign reserves to invest overseas and get returns, he said.

China has been speeding up reform by recently launching a pilot scheme for yuan convertibility in Qianhai, in the southern city of Shenzhen.

The lack of yuan convertibility and capital controls have blocked private companies from investing abroad although they are more vigorous and productive than State-owned enterprises (SOEs), Sun noted.

Over the past few years, China has encouraged domestic companies to acquire and invest in overseas assets, but SOEs have been taking the lead.

China's outbound direct investment in non-financial sectors reached $28.5 billion in the first five months, up 40.2 percent from a year ago, according to the Ministry of Commerce.

The joint statement shows that the country hopes to bolster its slowing economy by reinvigorating private companies, said Zhou Dewen, chairman of the Wenzhou SME Development Association.

Zhou said that 70 percent of local private companies do business overseas and will hope to benefit from the new policy.

The new measures indicate that details on direct investment overseas by local residents might also come out soon.

The central government gave its approval in March for Wenzhou to accelerate its financial reforms by allowing residents to invest abroad, but detailed guidance has not yet been released.

Risks remain in expanding overseas given global economic uncertainties, Ji Li, an analyst with Zero2IPO, told the Global Times in an e-mail. But the new measures should help Chinese exporters in setting up facilities in foreign markets and sell goods there, Ji noted.