China's direct investment overseas rises to US$ 6.9b
(AP)
Updated: 2006-01-23 13:31

China's outward foreign direct investment rose 26 percent to US$6.9 billion (euro5.7 billion) in 2005, the Commerce Ministry reported Monday, a much slower rate of increase than the year before.

The government has been encouraging companies to pursue overseas acquisitions and other investments, part of a so-called "going out" policy aimed at countering the country's huge trade surplus and burgeoning foreign reserves.

Chinese companies have been acquiring overseas oil and gas fields, manufacturers and other assets, but the pace of growth is already slowing. In 2004, foreign investment shot up 93 percent to US$5.5 billion (euro4.6 billion).

Overseas investments are still overshadowed by the country's huge inflows of foreign direct investment, which is estimated at US$60 billion in 2005, according to recent government reports.

In early 2005, China increased the total amount of foreign currency Chinese can buy each year for offshore investment purposes to US$5 billion from the earlier limit of US$3.3 billion.

The State Administration of Foreign Exchange has said it eventually plans to cancel the quota on such investments.