BEIJING, June 5: China's overseas investment is expected to grow at least 30 per cent in 2007, as the government continues to encourage local companies to expand abroad, state media said on Tuesday.

This year overseas investment made by Chinese enterprises is likely to exceed $20.9 billion dollars, said Chen Jian, assistant minister of commerce, according to the Shanghai Securities News.

The ministry's 11th five-year plan, starting from 2006, also forecast the aggregate direct overseas investment by Chinese companies will top $60n by 2010, he added.

China's direct overseas investment started to boom from 2005, when the figure jumped 123pc from 2004 to $12.3 billion.

Last year, Chinese companies, excluding banks, insurers and security firms, invested $16.1 billion abroad through mergers and acquisitions.

The government encouraged companies to make investment abroad, Chen said, as Beijing steps up measures to reduce the excess liquidity in the financial system.

China's forex reserves hit $1.2 trillion by the end of March, bolstered by soaring trade surplus and strong investment inflows.—AFP