HONG KONG - To sustain growth and move up the value chain amid global economic uncertainty, Chinese multinationals need to have a smart strategy in promoting overseas investment, Supachai Panitchpakdi, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) said on Wednesday.

As an already favorite destination for foreign direct investment (FDI), China is "a key source of overseas investment as well," Panitchpakdi made the remarks in a keynote speech at the second China Overseas Investment Summit (COIS) at the Hong Kong Conference and Exhibition Center, while indicating over the past decade, China's outward investment has grown by 25 percent, outpacing the increase of 6 percent for traditional investors from developed countries.

"As a result of this rapid expansion, China now ranks ninth among the top 10 investing countries globally with FDI outflows in 2011 outstanding at 65 billion US dollars," he said, noting that the majority of them went to developing economies, especially those in Africa and Asia.

However, despite Chinese firms coming a long way in improving their competence in expanding global presence, more needs to be done.

"Chinese transnational businesses should move up the value chain. As Chinese economy becomes more knowledge and capital- extensive, there may be advantages for Chinese firms to relocate labor-extensive activities to other developing countries, particularly African nations, which, with an emerging population and a large market, could prove a real opportunity for Chinese manufacturing and services firms," he told a packed hall.

In this process, Chinese companies should seek to diversify their focuses and investments in Africa, for instance, extending from natural resources and construction industries to automobiles, IT, electronics, solar power sectors, etc.

"I would urge Chinese business leaders to avoid mistakes made in the past by some multinationals. Environmental damages and social conflicts can, and will, hamper the global operations of that company," the secretary-general stressed. Therefore, it is essential for Chinese businesses to take corporate social responsibility very seriously.

"Chinese firms must make sure not only shareholders, but all the stakeholders, must be positively aware of the commitment regarding environmental, social and governance issues," he said, adding that investing in human resources, instead of simply making use of them, is of great significance to enhance the competitiveness and sustainability of transnational corporations.

The two-day conference themed "Global Economic Transformation and New Approaches to China's Overseas Investment" was opened here on Wednesday. More than 1,200 government officials, business investors, senior managers and experts from over 40 countries and regions were expected to participate in the high-profile meeting.

The first COIS was held in the city on Nov 15-16, 2011.