Business people exploring cooperative possibilities at an international trade fair in Xiamen, Fujian province. [Photo / China Daily]

In spite of the global economic crisis, China's investment overseas has had an upward trend, so that by now this investment and cooperation, along with foreign trade are an important part of its opening-up.

This is a direct result of China's joining the World Trade Organization (WTO), 10 years ago, especially the outward investment.

The central government has supported companies that have the ability to expand overseas for the purpose of mutual benefits and joint development.

It also hopes that Chinese companies can enlarge their scale of operation and grow stronger overseas.

By the end of 2010, China had more than $300 billion worth of direct outward investment and its companies have investments in 177 countries and regions. They have 16,000 companies abroad with estimated assets of more than $1 trillion.

These companies have paid $11.7 billion in local taxes and have provided more than 1 million jobs for local people.

The typical forms of outward investment and cooperation are as follows:

M&A

The forms of outward investment and cooperation have grown from single projects to regional or group cooperation and the number of M&As involving resources, energy, and brands has been increasing rapidly.

More small, private companies have been joining the overseas expansion, targeting energy resources, electronic communications, and automobile manufacturing.

Outward investment in the form of M&A has become a major way to expand and often focuses on acquiring technology, sales networks, or energy resources.

Projects

Over the past decade, Chinese companies have had a turnover of $370.3 billion foreign project contracts.

In 2010, turnover of these projects reached $92.2 billion, a year-on-year increase of 18.7 percent.

More than 60 percent of them involve petrochemicals, transportation, electric power, and electronic communications, which carry much larger profit margins.

And, more and more, they come in the form of engineer, procure, construct (EPC), which involves much higher quality requirements.

Some companies have even tried their hand at build, operate, transfer (BOT) projects, which can be more profitable but also risky.

As more Chinese companies eye the overseas markets, more, and different, parts of the world are accepting Chinese engineering technology and standards.

More than 2,600 Chinese companies now have qualifications that allow them to handle project contacts abroad.

In 2010, 54 Chinese companies made the list of the top 225 international contractors of the Engineering News-Record, an authoritative academic publication. And the turnover of these projects was near the top in 2010.

Labor services

Chinese labor services overseas have grown in the past decade, foreign labor contracts has been worth $56.1 billion.

China has also put a great deal of effort into monitoring the overseas labor business and the number of labor disputes has seen a commendable decrease.

The author is director-general of the Ministry of Commerce's Department of Outward Investment and Economic Cooperation, China.