China says its foreign investments aid world economy

ANNAPOLIS, Md., June 18 (Reuters) - China's growing investments overseas can serve as a stabilizing force by helping ease global economic imbalances, Chinese Commerce Minister Chen Deming said on Wednesday.

"Our foreign exchange reserves are already very big, so we need our firms to invest overseas in order to keep our own economy more balanced and also to contribute to global economic stability," Chen told reporters.

Fueled by record trade surpluses, China's foreign exchange reserves have ballooned in the past few years.

Chen said that with the reserves set to surpass $1.8 trillion by the end of the year, it was increasingly important to ease that buildup of cash.

Western business groups and politicians have expressed concerns about Chinese investment, in some cases raising national security issues. In recent years computer maker Lenovo Group Ltd (0992.HK) purchased IBM's (IBM.N) PC division and Chinese companies and funds have invested billions of dollars in companies such as UK bank Barclays (BARC.L), miner Rio Tinto (RIO.L) and Blackstone (BX.N), a U.S. private equity group.

Chen said that while it was natural for affected companies to complain, the influx of investment into countries such as the United States would be good for their economies, as Chinese firms brought capital and created jobs, and abided by international norms and local regulations on investing.

"Only through that kind of competition can the United States raise its own competitiveness," he said on the sidelines of economic meetings with the United States being held at the U.S. Naval Academy in Annapolis, Maryland.

"Whether one is considering the interests of the United States or global economic stability, they'll both benefit," Chen added, saying he hoped talks on an investment treaty with the United States would lead to greater protection of Chinese investors' interests. For details, see [ID:nN18453330]

"We hope that our investors will receive equitable, fair treatment, and that the relevant policy framework will be transparent, so that our investors will have their due sense of security," he said. (Reporting by Jason Subler; Editing by Tom Hals)