Investment overseas set to climb to record level

The growth of outbound direct investment from China is remaining steady this year, leaving the world's second-largest economy on track to exceed last year's record figure, officials said on Thursday.

Investment in the nonfinancial sector rose to $56 billion in the first half, an increase of 29.2 percent compared with the same period last year, thanks in part to the development of new trade routes and free trade zones.

The country became a net capital exporter last year as the ODI figure of $116 billion exceeded capital inflows for the first time.

Zhang Xiangchen, the deputy international trade representative at the Ministry of Commerce, said the fast-growing pace of ODI can be attributed to a range of developments that have taken place at home and abroad.

At home, simplified government review procedures, the existence of adequate cash reserves and a growing private sector have encouraged Chinese companies to learn from their foreign rivals and seek takeover targets via outbound mergers and acquisitions.

"China's ODI growth is expected to reach 10 percent this year as a growing number of businesses in developed nations come to see the advantages of working with Chinese companies," Zhang said.

The European debt crisis offers Chinese companies an opportunity to acquire European companies, especially ones in Italy, Germany, the Netherlands and the UK, at bargain prices.

ODI from China's manufacturing sector jumped by 63.1 percent to $5.09 billion between January and June. The country shipped complete equipment worth $60 billion, including units for nuclear power stations, waterworks and railways－a 10 percent year-on-year increase.

The government has been promoting its "going global" strategy to open up more overseas trade channels.

Zhang Ji, assistant minister of commerce, said more measures will be taken to help domestic enterprises undertake joint international projects.

"Enterprises are encouraged to conduct mergers and acquisitions involving foreign brands, technologies and manufacturing facilities to improve their global competitiveness," Zhang said.

"Moving factories to foreign countries lets them further engage with the market and obtain better treatment on tariff rates."