TAIPEI: China's homegrown private equity industry could grow to 10 times its current size in the next few years as domestic firms fund SMEs, allowing China's PE firms to better compete in a market long-dominated by global giants, industry executives said on Wednesday.

The mainland's private equity industry - still in its infancy only three years ago - could grow to 1 trillion yuan over the next five years from less than 100 billion yuan now, Katherine Wang, chairwoman of Power Capital Corp, said at a conference in Taipei.

"One major policy the government has taken is to encourage PE funds by giving them tax incentives from their investments," said Wang.