The establishment of the government-supported ChinaGoAbroad (CGA) agency to connect Chinese investors with European companies signals China’s intention to expand abroad. CGA is to be launched in 2013 as a members-only platform.

With China’s total outward investments for 2011 worth $70bn, according to Chinese Ministry of Commerce, increased overseas investment by Chinese companies is “an inevitable trend”, says China’s commerce minister Chen Deming. Capitalising on this trend, the CGA-sponsored China Overseas Investment Fair will be held in Beijing in December.

“In recent years, China’s overseas investment has been on the increase,” Mr Zhang Guobao, chairman of the China Outbound Development Association, told China Radio International. “But the country, being the second largest economy in the world, is ranked only 13th in terms of the value of overseas investment. Therefore, I believe Chinese enterprises still have great potential to further expand their overseas investments.”

Inward FDI to China this year, estimated to be worth $91.7bn, continues to outperform outward FDI. However, inward FDI flows have been declining, reports China Daily, with FDI to China declining by 3.5% in 2012. Yet overseas investments, driven by domestic Chinese enterprises, are expected to expand, as the protracted eurozone debt crisis in developed economies presents opportunities for China’s overseas mergers and acquisitions.

Nonetheless, while interest in overseas investment increases, the CGA reported that communication between Chinese investors and European companies continued to be a key challenge and the CGA is expected to help overcome these challenges.