The Ministry of Commerce and the Ministry of Foreign Affairs recently issued the first industry-based guidelines for domestic enterprises that invest in land overseas.

The guidelines include information on such areas as agriculture, fishing, forestry, mining, manufacturing and service industries, among others, in 67 countries and regions.

At a time when the country is seeing a flood of foreign investment in the domestic market, these new guidelines may not seem as significant on first glance as the industrial guidelines for foreign investment in China released two years ago.

In the long term, however, the current investment directive should prove no less significant.

Foreign capital has helped the country's economy take off since the launch of the opening-up policy in the late 1970s. It makes up for domestic capital shortages that could pose a threat to the country's healthy development.

Last year China was the No 1 destination for foreign capital in the world, attracting an actual investment of US$53.5 billion.

The large pool of foreign investment is in stark contrast to Chinese companies' investment on overseas soil.

Official statistics reveal China's overseas direct investment reached only US$2.3 billion by 2003.

This contradicts our "go out" strategy mapped out in recent years as economic globalization was gathering steam.

Given the fact of globalization, if a country confines its economy to its domestic market, it will deprive itself of the opportunity to enjoy the fruits of the globalized flow of production factors.

A country cannot depend on its domestic market forever.

Although they might want to make better use of foreign markets, many domestic investors know nothing about the risks in foreign markets. So, generally, they are ignorant of the factors involved in investing abroad, even though they are quite capable of investing in the domestic market.

The new guidelines can help prevent uninformed investment in overseas markets.

It is crucial, however, that the two ministries co-operate to continually update the guidelines in accordance with changing business climates in overseas markets.