CAREFUL REASONING: Larry Pope (left), CEO of the U.S. pork giant Smithfield Foods Inc., attends a U.S. Congressional hearing on July 10. He explained that Shuanghui's Smithfield purchase will lead to more pork exports from the United States to China (WANG ZONGKAI)

Huo Jianguo, President of the Chinese Academy of International Trade and Economic Cooperation, a think tank under the MOFCOM, said that the surge in outward FDI was mainly driven by domestic enterprises eager to tap overseas markets and profit from using global resources. "Debt crises and slowing growth in developed economies opened up great opportunities for Chinese enterprises to invest abroad, and the appreciating yuan helped the process," Huo said.

Zhao Zhongxiu, Vice President of the Beijing-based University of International Business and Economics, said globalization has been a buzzword for Chinese companies since 2003. Many Chinese companies, with massive amounts of cash in hand, think the time is ripe to expand overseas after the financial crisis roiled the world and led to fire sale prices of some cash-strapped foreign companies, said Zhao. "There are two types of Chinese companies that want to go global—big state-owned companies that wish to acquire foreign technologies and resources, and the more nimble small and medium-sized private firms that look for business opportunities in overseas markets," he said at a sideline of the 17th CIFIT.

Wu Liang, Administrative Deputy Editor in Chief of the Economy & Nation Weekly magazine, said that "going global" is more than a buzzword for Chinese firms: It's an absolute imperative if they want more say in the world's IT revolution. "The IT revolution changed the world, with the Internet reshaping industrial structures and a reshuffle of the global value chain. If Chinese companies fail to seize overseas opportunities during this process, they will lag further behind their foreign peers."

In terms of where Chinese firms like to invest, experts say it depends on what their objectives are.

Anne Marion-Bouchacourt, Group Chief Country Officer for Société Générale China, said emerging markets may have a lower threshold for Chinese companies, but in order to be the best player in the industry, it's necessary for Chinese firms to compete with the best players in mature markets like the United States and the European Union.

Tough road ahead

Despite soaring outward FDI figures, risks and challenges loom. Li Yizhong, Deputy Director of the Committee for Economic Affairs at the National Committee of the Chinese People's Political Consultative Conference, the country's top political advisory body, said risks might come from social unrest in the invested country, market turbulence and cultural clashes.

Li said the Chinese Government should formulate a national plan to support ambitions for overseas expansion to make it easier for companies to do so. Chinese companies also need to strictly obey laws and regulations in the investment destination countries, especially in terms of intellectual property protection and labor laws, he said. "Having a talent pool specialized in globalization is also a vital factor."

Li also said companies should always pursue win-win outcomes instead of only considering their own gains. A good example is Geely's purchase of Sweden-based Volvo, he said. "Geely promised not to lay off workers, not to shut down factories and not to move factories from Sweden," said Li. "This ensured a smooth purchase."