YINCHUAN, July 30 (Xinhuanet) – The new bright spot in the future China-Arab economic relations will probably be Chinese enterprises "going abroad", according to a Chinese economist.

That means Chinese enterprises invest in Arab countries, Pei Changhong, a researcher with the Chinese Academy of Social Sciences said here on Saturday.

Pei, director of Economic Research Institute of China's Academy of Social Sciences, made the remarks at a seminar of the 2nd China-Arab States Economic and Trade Forum, which was held in Yinchuan, capital of northwest China's Ningxia Hui Autonomous Region, from July 29 to July 30.

He said that China’s merchandize trade shot up by more than 30 percent in 2009 and 2010. In particular, such trade between china and some emerging markets has been growing even faster.

"The China-Arab States merchandize trade will top 200 billion U.S. dollars this year and is projected to grow rapidly over the next few years, especially during the 12th Five-Year Plan period," he added.

In terms of utilizing foreign capital, he said the petrodollar revenues of Arab countries are controlled by the state to form state capital instead of industry capital, which is invested by means of sovereign wealth funds and by focusing on the stock market.

Therefore, even if the investment in china by Arab countries in the future may likely increase further, the possibility of a substantial growth or becoming a major source of investment is not great.

"So, in the next few years, a new bright spot in China-Arab economic relations will probably be Chinese enterprises going abroad, that is, Chinese enterprises invest in Arab nations," Pei Changhong explained.

According to Pei's analysis, China’s outbound direct investment (ODI) surged by 30 percent during the 11th Five-Year Plan period. However, China’s total ODI is projected to top 500 billion U.S. dollars, in line with the "12th Five Year Plan". Arab countries should thus become the priority areas for Chinese enterprises to go abroad. This is closely linked to the fact that China is seeking resource-oriented investment.

In Pei’s opinion, in the future, investment in Arab countries by Chinese enterprises will likely focus on two areas, i.e. crude oil and contracting for construction projects.

On one hand, China will invest in oil production, oil exploration and other oil industrial chain projects. On the other hand, there is a huge demand for infrastructure construction in Arab countries present or in the future. Therefore contracting for construction projects will become a very competitive industry with great potential for development.