Official figures show US$2.1b went to foreign shores last year, but analysts say the real figure could be closer to $35b Mainland enterprises have invested US$11 billion in foreign projects since economic reforms began in the late 1970s, the Chinese Macroeconomic Society reported this week. Outbound investment amounts to a mere 2 per cent of the US$501 billion in actual foreign direct investment received on the mainland, but the pace of growth has accelerated in the past two years. According to the report, the Ministry of Commerce has approved applications from 7,470 enterprises to invest US$11.4 billion abroad. Last year alone, the ministry approved applications from 510 companies to invest US$2.1 billion abroad, more than double the figure from 2002. In the first four months of this year, the ministry has approved applications from 197 companies to invest US$651 million abroad, a 22 per cent rise over the same period last year. Analysts say total foreign investments by mainland investors may be far bigger than what the ministry has on record as many private companies invest abroad illegally. Some estimate that total outward investment may be as high as US$35 billion. Beijing has limited outbound investment in the past because it wanted to prevent capital flight and force mainland investors to invest domestically. However Andy Rothman, a Shanghai-based analyst with Credit Lyonnais Securities Asia, predicted that outbound investment would accelerate in coming years. 'China is at the very early stage of a trend in which companies are beginning to invest overseas,' Mr Rothman said. 'The largest investments to date have come from state-owned natural resources companies, but as China's private sector develops, companies will start behaving like private firms around the world, making strategic investments and acquisitions abroad.' Chief among the mainland's large global investors is China National Offshore Oil Corp, which became the largest offshore oil producer in Indonesia in 2002 when it bought a significant stake in an Indonesia oil drilling company for US$585 million. Large private players are also pushing into non-energy sectors overseas. Liu Yonghao , chairman of Shanghai-based agricultural and commodities firm New Hope Group, recently invested US$9 million in setting up an air-conditioner manufacturing plant in Hanoi, Vietnam. Mr Liu recently visited the plant to give a pep talk to his workers. 'I encourage all of you to work hard,' he said as he exhorted his Vietnamese assembly-line workers at the Hanoi West Lake Development Zone early last month. 'Those who do well, I will pay for your vacations in China. Come and visit us at our operations in Chengdu and Shanghai.' However, foreign investments will likely remain a small portion of Mr Liu's growing empire, which has assets exceeding US$1.1 billion.