China state owned companies increase outbound investments

BEIJING – China’s major state-owned companies invested US$35,7 billion abroad last year as they expanded foreign operations despite the global economic crisis, the government said yesterday.

Some 117 of the 136 major companies directly controlled by the Cabinet invested abroad in 2008, accounting for 64 per cent of China’s total outbound investment, the Commerce Ministry said. It said 80 per cent of their foreign operations were profitable.The ministry gave no comparative figures for investment in 2007. The companies controlled by the Cabinet include Bank of China Ltd., PetroChina Ltd. and China Telecom Ltd.China’s outward investment in 2008 included the US$14 billion purchase by Aluminum Corp. of China, or Chinalco, and US-based Alcoa of a 12 per cent stake in Anglo-Australian miner Rio Tinto Ltd.Beijing is encouraging Chinese companies to invest abroad to diversify the economy away from reliance on exports and construction and to take advantage of foreign asset prices that have plunged over the past year.In April, the Commerce Ministry reported that outbound investment in the first quarter was US$3,7 billion – a sharp decline from the previous year when Chinalco made its investment in Rio Tinto.-Nampa-AP