China's private equity firms will face tougher rules and more difficulties in raising money this year, Zero2IPO Research Center said.

"A tightened supervision on private equity funds is expected to expand nationwide this year," the firm said in a report yesterday.

Extending the regulations to the rest of the country will force some firms to start cleaning up their operations that may breach the new rules, the report added.

In November last year, the National Development and Reform Commission, the country's top economic planner, expanded regulations on the equity investment market nationwide. Tianjin is the first city in China to clean up its equity market by setting up Tianjin Equity Investment Fund Center.

China's private equity market boomed in 2011. According to Zero2IPO data, 323 new funds were launched in the mainland from January to November, a stunning growth of 204 percent from the total in 2010.

The total amount of funds raised in the Chinese mainland in the 11 months was US$26.4 billion, a surging increase of 237 percent from the total in 2010.

Zero2IPO estimated that new private equity funds raised in 2011 may reach US$30 billion.

But the report cautioned that fund raising by private equity firms will become more difficult this year with tightened liquidity in the market. The People's Bank of China has imposed several measures to control inflation.