By Alison Tudor, Asia Private Equity Correspondent

HONG KONG (Reuters) - The Blackstone Group is considering helping more Chinese firms expand abroad, said Hamilton James, the global private equity firm's president and chief operating officer on Thursday.

"I think there will be some fantastic opportunities for private equity in outbound partnering with Chinese corporations and Chinese institutions," James told a private equity conference organized by the HK-based AVCJ.

"Every CEO and every government ministry that I met with in two days in Beijing, every single one of them talked about making acquisitions outside of China in western markets," he added.

Chinese companies buying foreign firms has hit a record volume of $19 billion so far this year according to researchers at Thomson Financial, bolstered by encouragement from the government.

Blackstone is believed to have special access to deals in the Middle Kingdom after the Chinese government invested $3 billion in the private equity firm.

Blackstone is already partnering with China National Chemical Corp (ChemChina) in a A$3 billion ($2.75 billion) bid for Australia's Nufarm Ltd (NUF.AX: Quote, Profile, Research), a deal that would create the world's largest generic farm chemicals firm.

CREDIT MARKETS

James said he thought the backlog of buyout debt held by investment banks was being unwound as confidence recovered after a global credit crisis roiled markets over the past four months. 

"We're already seen signs of recovery for moderate-sized, call it $5 billion or less."

He believed that there was some upside for private equity firms from the credit crisis.

"Now prices are much more attractive, much less competition and I think we're going to be able to do some very interesting things when the credit markets open up."