China's overseas investment poses no threat to foreign companies, said an official with the Ministry of Commerce (MOC).

China's ratio of overseas investment is lower than most developing nations, said MOC official Zhao Chuang at a forum held in Weihai in east China's Shandong Province.

China's direct use of foreign capital reached 60.5 billion U.S. dollars last year while its overseas investments were less than seven billion dollars, 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 100 million dollars of foreign capital, it invests 120-140 million dollars 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, who stressed that China does not pose a threat to companies anywhere.

From the time it began economic reforms to December 2005, China's total overseas investments were only 51.7 billion dollars, equivalent to just one year's overseas investment for Germany or France. But even if they remain 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 was respectively 26 percent, 25 percent, 110 percent, 78 percent and 80 percent.

The year of 2005 was China's biggest year ever for overseas investment but the figure of 6.92 billion dollars is puny when compared with the 860 billion dollars total capital flows in the international market that year.
 
Editor: Yan