Companies bursting at the seams with cash to spend on acquisitions are usually the stuff of boardroom dreams - except if the money is coming from the mainland, in which case it is subject to scrutiny worldwide. Beijing has been encouraging a spending spree by the country's state-owned and private sector firms in a bid to take outbound investments to US$560 billion by 2015. But the flood of money raises concerns worldwide. In 2005, state-owned oil major CNOOC withdrew its bid to buy US energy giant Unocal in the face of US political opposition while in 2011, Huawei had to withdraw its attempt to buy US server technology firm 3Leaf owing to Washington's concerns over national security. What makes it doubly difficult for Chinese outbound capital is the cumbersome procedure at home. And that's where Shanghai Free Trade Area (FTA) enjoys its main advantage. With fewer bureaucratic obstacles for overseas investments, it is an ideal springboard for Chinese money to venture abroad, said Willis Weng Wei, managing director of the Shanghai Joint FTA Development. The Shanghai FTA expects to have more than 100 mainland companies make a total of US$3 billion to US$4 billion of overseas investments by the end of this year, said Weng recently at the China Goes Global conference in Shanghai. That would be a big jump from June 30, when 49 Chinese firms had made a cumulative total of US$1.27 billion of overseas investments through the FTA, Weng said. At least 60 mainland companies have made overseas investments through the Shanghai FTA, he added. "We are talking to many companies who wish to invest overseas. The Shanghai Free Trade Area is a bridgehead for the globalisation of Chinese companies. We give more choice to clients who used to invest overseas through Hong Kong." The FTA offers easier procedures for mainland companies investing abroad, Weng said. Deals of less than US$300 million are approved within five working days while loans to finance overseas investments are offered with lower financing costs. But he admitted Hong Kong is still far ahead of the Shanghai FTA in legal and tax aspects. "Hong Kong and Shanghai will be the two major points of China for companies investing abroad. They can work together," he said. As an example of cooperation between Shanghai and Hong Kong in overseas Chinese investments, Weng cited state-owned carmaker Dongfeng Motor, which acquired a 14 per cent stake in Peugeot Citroen for €800 million (HK$8 billion) this year. Dongfeng made its investment in the French carmaker through special purpose vehicles in Shanghai FTA and in Hong Kong, Weng said. In the first half, 6,970 companies were registered in the FTA, 14 times the number in the same period last year, Weng said. As of June 30, there were 1,245 companies in the FTA, including 492 from Hong Kong, 113 from Taiwan and 110 from the US. Yang Bin, general manager of investment banking at Shanghai Pudong Development Bank, said the Shanghai FTA could be made even more business-friendly, like the British Virgin Islands (BVI) and Cayman Islands. He said many mainland companies invest abroad through firms in BVI and Cayman Islands. "The Shanghai Free Trade Zone is nowhere as advanced as it has been made out to be," said Jean-Marc Blanchard, executive director of the Wong Centre for the Study of Multinational Corporations, a US research institute. "A lot of companies established there are very small operations." The US$1.27 billion of overseas investments made through the FTA is "not a lot", he added. An earlier version of this article mispelled Jean-Marc Blanchard's name. We apologise for the error.