Expert: gov't can provide more help to overseas Chinese investors

The Chinese government can provide more help to overseas Chinese investors who often find themselves hamstrung when trying to invest abroad, experts say.

China's outward direct investment totaled 16.1 billion dollars in 2006, up 31.6 per cent over the previous year, according to Ministry of Commerce statistics.

When they try to invest abroad, Chinese enterprises lack a network of people and sales channels, knowledge about the local market and communication, Wu Jianmin, president of China Foreign Affairs University, told China Daily.

"They need help from diplomatic resources," Wu said.

"Diplomatic resources" refers to a wide range of people and institutions that could provide Chinese investors with knowledge of local markets.

The resources include China's embassies in the investment destinations, scholars, and retired diplomats and officials with a good command of the country.

For example, an investor might find it very difficult to get in touch with key officials in a country when he intends to invest, Wu said. "But diplomatic resources can easily help them find the right person."

"We lag behind by countries such as the United States (in terms of helping enterprises' outward investing)," he said.

The Chinese government will encourage and help qualified enterprises to invest abroad, Vice Commerce Minister Liao Xiaoqi told the East Asia investment forum in Beijing. A main measure is to establish overseas economic cooperation zones, which both accelerate Chinese investors' "going out" and benefit local industrial clusters.

Haier Group, one of China's leading home appliance makers, established in November 2006 the first economic and trade cooperation zone in Pakistan. The zone targets at home appliance manufacturing, related supplies and services.

Some Chinese companies are planning other zones of this kind in the Association of Southeast Asian Nations.

Liao said the government will grant investors more information by holding trade and investment events as well as investment-guideline websites.

China, which has been one of the world's largest investment destinations for several decades, is emerging as a growing overseas investor. Some Chinese enterprises are going abroad for larger market access, some for more technologies and some for resources.

Moreover, some others are going out when they find that the space for their further development is limited at home.

In the Chinese central government's blueprint, the country's overseas investment will hit 60 billion dollars during the 11th five year plan (2006-10).

"The figure is conservative. Our development is usually higher than the expectation of experts," said Chen Jian, assistant commerce minister.

"China's outward investment is entering into a fast growth era from the early stage," he said. Chen expects China's outbound investment to reach 30 billion U.S. dollars for the whole year of 2020.

China's 60 billion dollars annual outward investment is too small compared to the foreign direct investment it attracted - 600 billion dollars in 2006.

"The ratio (between inflow and outflow investment) is 1.2:1 in developed countries," said Wu of China Foreign Affairs University. "Although China is still a developing country, qualified enterprises are also driven by the trend."