BEIJING - About half of China's overseas investments, totaling more than 600 billion yuan, will earn no return or incur losses in the next five to ten years, an expert said on Wednesday.

"The losses incurred by China's overseas investments are just part of the full picture. The risks are more severe than has been realized," Hua Liming, guest research fellow of the China Institute of International Studies, told the 2012 Diplomats Economic Forum in Beijing.

The main reason for the severe losses in Chinese enterprises' overseas investments is a lack of "soft power", though China's economic power has increased in the past few years.

"Chinese enterprises going abroad generally lack the ability to operate internationally and have little understanding of the local law and business environments," Hua said.

However, exploring international markets is a must for Chinese enterprises, according to Hua and other speakers at the forum.

“China’s overseas investments are at an elementary stage. We need to learn from the developed countries,” said Sun Yongfu, head of the Department of European Affairs at the Ministry of Commerce.