CHINA’S overseas direct investment is projected to rise at least 10 percent annually for the next five years, a trend that will soon make the country a net capital exporter, a senior commerce ministry official said yesterday.

    “It’s only a matter of time,” said Zhang Xiangchen, an assistant minister at the Ministry of Commerce, referring to when China’s outbound investment will eclipse inbound investment.

    “If it doesn’t happen this year, it will happen in the near future,” he added.

    Speaking yesterday at a news conference to publicize new regulations meant to simplify overseas investments for Chinese companies, Zhang said the value of overseas assets held by Chinese firms still lagged behind foreign competitors, including in the energy and natural resource sector.

    The Chinese Government’s push to stoke overseas investment is part of an effort to slow the rise of its foreign currency reserves at home, while helping domestic companies buy assets, resources and technology overseas.

    Although Chinese outbound direct investment is expected to reach US$120 billion this year, Zhang said, Chinese firms’ holdings equaled only a tenth of the assets held by American firms and only half those held by Japanese companies.

    Under the revised rules, which were first published in September, most domestic firms will no longer need to seek Ministry of Commerce approval prior to making an overseas investment, but must register the investment with regional regulators.

    Ministry of Commerce approvals only are required for non-financial outbound investments in “sensitive countries and regions” and “sensitive sectors.” The regulator also eliminated approval requirements for the formation of offshore special purpose investment vehicles.

    The new rules also greatly simplify approval and filing procedures and reduce the time allowed to review overseas investments.

    Of the total 6,608 overseas investments approved by the Ministry of Commerce in 2013, only 100 deals — mostly in “sensitive” sectors related to national security — would require approval under the new regulations, Zhang said, adding that companies have so far reacted “very positively” to the changes.

    China is moving to diversify its US$4 trillion in foreign exchange reserves, while reporting its slowest economic growth since the global financial crisis. On Tuesday, China said its economy grew 7.3 percent in the third quarter, the slowest pace since the first quarter of 2009.

    Chinese firms made US$74.96 billion in offshore acquisitions in the first nine months of the year, a 21.6 percent rise from a year earlier. Foreign direct investment amounted to US$87.36 billion in the same period.

    Zhang noted that Chinese energy and mining companies hold fewer overseas assets compared to companies from developed countries. The energy and mining sectors accounted for 16.7 percent of Chinese companies’ overseas holdings, a proportion Zhang considered low.

    “Energy and natural resources is something we need,” he said. “Importing the energy and resources we lack to manufacture for the world’s consumer is very normal.”

    In 2013, China’s non-financial direct investment overseas amounted to US$90.17 billion, a rise of 16.8 percent from a year earlier, according to the ministry’s statistics. Total non-financial foreign direct investment at year’s end amounted to US$525.7 billion.(SD-Agencies)