Chinese companies made overseas direct investments valued at US$2.85 billion last year, an increase of 5.5 percent compared with 2002, the Ministry of Commerce said Monday.

By the end of last year, the total amount of overseas direct investment by these companies reached US$33.2 billion, the ministry said in the Statistical Communique of China on Overseas Direct Investment, jointly issued with the National Bureau of Statistics.

This was the first time for the country to issue such a communique, suggesting the government wants to beef up supervision on overseas investment, said Jin Bosheng, a senior Chinese Academy of International Trade and International Co-operation researcher.

China's overseas direct investment activity lagged far behind developed countries, however, he said.

Figures from the communique indicate that direct investment of Chinese companies accounted for only 0.48 percent of the world's total.

According to the communique, State-owned firms took a lead in making overseas investment, accounting for 43 percent of the firm totals.

Nearly half of investment by Chinese companies was placed in Asia.

Peng Nanfeng, a Ministry of Commerce official, said China would stress supporting its enterprises in investing overseas.

"Investment overseas has become a major way for Chinese enterprises to participate in global economic competition since China began to adopt an opening up policy more than 20 years ago," Peng said.

Wang Zhao, a senior researcher with the Development Research Centre under the State Council, said global investment can also help ease the pressure for the yuan to appreciate.

"Besides pressure from the current account surplus, the yuan appreciation pressure also comes from the large capital inflow," he said.

The government should encourage domestic capital to "go out," he said.

Yang Zilin, president of the Export-Import Bank of China (China Exim Bank), said the time is basically ripe for domestic companies to "go out."

"After about two decades of development, the technical level of domestic companies has improved significantly," he said.

Some companies should produce internationally competitive products, he said.

After China's accession to the World Trade Organization, more countries would also open their markets to Chinese companies, he said.

Yang said his bank would not only provide more long-term credit with lower interest rates for Chinese companies in the next few years, but also help them explore more investment areas globally.

"Export and import banks in many foreign countries have given more emphasis on supporting companies to invest in other countries, rather than supporting exports of commodities," Yang said.

China Exim Bank will provide quality and highly efficient financial services for Chinese companies investing overseas, he said.

The bank will expand loan services to Chinese companies which engage in processing trade or contract projects in foreign countries, he said.

"The bank would provide first priority credit for export of equipment, technology and raw materials, which are demanded by the overseas investment projects," he said.

(China Daily September 7, 2004)