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China's overseas investments pose no threat to foreign companies, an official with the Ministry of Commerce (MOFCOM) has stated. The country's level of such investments was lower than most developing nations, said MOFCOM official Zhao Chuang, at a forum held over the weekend in Weihai in east China's Shandong Province. China's direct use of foreign capital reached US$60.5 billion last year while its overseas investments were less than US$7 billion, giving a ratio of 1:0.11. This is lower than the average level of developing nations which stands at 1:0.19. By contrast, the figure for developed countries stands at 1:1.2 or 1:1.4, which means that when a nation attracts US$100 million of foreign capital, it invests US$120-140 million abroad. Recent overseas acquisitions by Chinese companies have attracted a great deal of attention. "But China is far from being a major overseas investor," said Zhao stressing that China didn't pose a threat to companies anywhere. From the time it began economic reforms to December 2005 China's total overseas investments were only US$51.7 billion equivalent to just one year's overseas investment by Germany or France. But even though comparatively small China's overseas investments are certainly growing fast. Government statistics show that from 2001 to 2005 the annual growth rate in overseas investment were year on year 26 percent, 25 percent, 110 percent, 78 percent and 80 percent. China's biggest year ever for overseas investment was 2005 but the figure of US$6.92 billion is small when compared with the US$860 billion of total capital flow in international markets that year. (Xinhua News Agency July 31, 2006)
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