Outflow of capital is growing fast, with focus on HK, Macau The State Council is mapping out detailed measures to encourage companies, in particular small and medium-sized ones, to invest more outside the mainland, according to Deputy Minister of Commerce Ma Xiuhong . The outward investment plans would focus on Hong Kong and Macau, Ms Ma told the South China Morning Post. The senior official in charge of promoting both inward and outward investment, Ms Ma was in Tianjin to attend an international-invesment promotion forum. The minister said: 'We have not only encouraged [small and medium-sized enterprises] to invest in manufacturing in foreign countries, which is the major form of direct investment by mainland companies overseas, but also worked to promote economic co-operation between Chinese [companies] and their foreign partners.' China topped the United States in foreign direct investment for the first time last year, attracting more than US$57 billion. The world's largest developing economy has absorbed more than US$600 billion since the late 1970s. Ms Ma said that while there had been a rapid increase in investment outflows in recent years, China was far from becoming a net provider of foreign direct investment (FDI). Mainland companies had invested US$37 billion abroad by the end of last year in nearly 8,300 ventures in more than 160 countries, the minister said. That is only 6 per cent of the total inward investment. Still, the minister said outward investment was growing fast. Most of the investments abroad had been made in the past few years. Zhao Chuang , deputy director of the ministry's foreign economic co-operation department, said the number of companies investing overseas rose 62.5 per cent last year and the number of firms with foreign investments was up by nearly a third on 2003. The value of projects in which Chinese firms invested overseas had also grown significantly, said Mr Zhao. In 1998, the average value was US$1.117 million. By last year the figure had risen to US$4.48 million, and 15 projects involved capital injections of more than US$50 million. Ms Ma said rising investments abroad would speed up the pace of China's integration with the global economy. She said the mainland was playing an increasingly active and significant role in a new wave of transnational investment. Addressing the flow of investment from the mainland into Hong Kong and Macau, Ms Ma said the closer economic partnership arrangements signed with the two special administrative regions (SARs) were 'very encouraging' developments. She said the central government was working on further measures to deepen economic integration with Hong Kong and Macau, and predicted more mainland firms, especially small and medium-sized ones in private ownership, would be seeking to invest in the two SARs.