EDITORIAL : THE GLOBAL TIMES, CHINA

Protecting overseas investments a challenge

"Going global" is the slogan propelling many Chinese enterprises dangling their feet in the international market. It is estimated Chinese central enterprises' overseas investment has topped 4 trillion yuan. Recently, pressing question has emerged: How should China protect its overseas investments?

A news report from China Youth Daily revealed of 18.8 billion yuan worth of Chinese projects in Libya, fewer than 400 million yuan worth of losses were claimed. Though the Chinese government did an impressive job evacuating some 30,000 Chinese nationals out of the war torn area swiftly, the scattered investments were left behind, subject to the perils of war.

Counting private assets and bonds, total Chinese overseas assets could top 20 trillion yuan, nearly half of China's GDP in 2010. Twenty years ago, the figure was only 20 billion yuan. Based on the current pace, overseas assets will soon approach the country's total GDP. How to manage these gigantic assets beyond China's borders poses a big challenge in many aspects.

First, there is no single agency in China dedicated to keeping track of these assets or investigating them, so questions of financial accuracy remain. Consequently, supervision and auditing of them are not desired. The insurance services loathe to cover these assets because they are exposed to different kinds of risk.

Power is an important defense line for overseas properties. For example, the US, in addition to its omnipresent navy fleet and army that can be deployed anywhere in the world within 24 hours, is good at using its political influence and diplomatic skills to maximize profit for American overseas assets. Japanese enterprises are more self-reliant. Its global network of manufacturing, trade and finance has helped shield Japanese overseas companies from worry to a large degree.

China will have to rely more on the central government to protect the country's overseas assets, while combining the advantage of both national power and enterprise ability. The ongoing "going global" ideal of Chinese enterprises and capital, and the following necessary protection of them, will also test the acceptance of Western countries when it comes to China's rise.