BEIJING, Sept. 5 -- Chinese direct investment abroad almost doubled last year as the government encouraged businesses to send capital out of the country, official figures showed.

Chinese companies directly invested US$5.5 billion overseas last year, up from US$2.9 billion in 2003 and US$2.7 billion in the previous year.

But the outward investment, while showing a growing tendency for Chinese to seek returns outside of their own country, remained less than a 10th of the foreign money that has been flowing in to exploit China's low costs and domestic market.

The figures for direct investment cover money going straight into such assets as businesses and real estate, not indirectly through the share market or loans.

Issuing the figures, the Commerce Ministry said Chinese investors had held direct investments abroad worth US$44.8 billion at the end of 2004.

"United States, Russia, Japan, Germany and Australia are the top destinations," it said.

It added that 75 percent of the investment went to the construction, manufacturing, retail and wholesale industries.

Faced with a tide of foreign money flowing into the country, much of it as bets on a currency revaluation, the government has encouraged Chinese investors to send their money out.

It has allowed exporters to keep their foreign earnings abroad, reinforced a long-established policy that promoted the buying or establishment of businesses outside of China, and asked banks to support outward investment.

By the end of last year, foreigners held US$562.1 billion in direct investments in China, the ministry said.

(Source: Shenzhen Daily/Agencies)