Even though State-owned enterprises have recently been making more outbound direct investments, they must be careful not to expand too quickly overseas, the State-Owned Assets Supervision and Administration Commission has warned.

For SOEs, "the process of 'going abroad' must be steady" and undue haste should be avoided, said Shao Ning, deputy director of the commission.

In his report to the 18th National Congress of the Communist Party of China, President Hu Jintao said the country should encourage domestic companies to increase the pace of outbound investments.

China saw its ODI increase to $60 billion in 2011, making it the fifth-largest investing country in the world.

From January to August, China's ODI increased by 29 percent to reach $52.52 billion.

SOEs have contributed greatly to the increase. From 2005 to 2010, SOE overseas investment rose to $49.9 billion, from $9.6 billion, accounting for 84 percent of the country's total.

Shao called on SOEs to be cautious as they move forward.

"On the one hand, SOEs have to go abroad," he said. "It's already an unavoidable trend."

But "on the other hand, they have to strengthen their competitive abilities on their way to becoming international."

China's SOEs have encountered many obstacles to the fulfillment of their overseas plans. Foreign governments, for instance, have blocked various proposals on national security concerns.

What's more, political turmoil in Africa and other places has also subjected Chinese companies to huge losses. The unrest that broke out in Libya last year, for example, affected more than $10 billion worth of projects, most of which pertain to the energy and construction industries, according to official figures.

"Risks abound, and those include political risks, social risks and the dangers that come from not knowing about foreign laws and regulations," Shao said. "We should keep learning."

Reports have said few SOEs actually benefit from having an overseas business, citing poor management. They have blamed the lackluster results on a lack of knowledge about foreign markets and inability to employ a sufficient number of qualified workers.

"Some SOEs perform well abroad, and the majority of SOEs make profits," he added.

Wang Yong, head of the assets commission, said on the sidelines of the Party congress that Chinese SOEs "need to look for business opportunities in various industries throughout the world".

At the same time, he cautioned: "We must make a special effort to benefit local people, communities and economies. We need to be responsible corporations in foreign countries."

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