China Railway First Group Co., Ltd resumes construction after COVID-19 eases in Suva, capital of Fiji on Oct 15, 2020. (Photo: Xinhua)

The COVID-19 pandemic, alongside the rising global political and economic uncertainties seen this year, means Chinese companies face high risks when looking to invest overseas, a report said.

The risks were detailed in the Handbook of Country Risk 2020, released on Thursday by China Export and Credit Insurance Corporation, or Sinosure, China's policy-oriented insurer. The annual report has served as a reference for Chinese companies seeking to invest abroad since 2005.

Country risks are likely to continue to increase globally in the rest of 2020 and beyond, with 61 countries identified as presenting high risks for Chinese enterprises. Some 93 countries are considered medium risk for investment, and 38 countries are low risk, the report said.

Sovereign credit risk levels are also rising globally, with 32 countries deemed high risk and 83 considered medium-level risks. Seventeen nations have seen occurrences of actual risk events for companies.

Since the outbreak of the pandemic, geopolitical turmoil across the world has intensified and global political instabilities have increased, said Cai Xiliang, vice-chairman of Sinosure, adding that global industrial chains and supply chains have also been greatly affected.

Against the backdrop of a global economic recession, intensified international trade frictions and fierce industrial competition, the risks of bankruptcy for enterprises have become more prominent. Some companies in the retail, automobile, and oil and gas sectors have been facing operating pressures since 2019.

"The epidemic has then greatly increased the risk of bankruptcy of many enterprises this year," he said. "The risk of global enterprises going bankruptcy will continue to rise in the future as the pandemic continues to ravage the global economy."

Cai said the amount of insurance Sinosure had provided to Chinese companies from January to October was $564.8 billion, 13 percent higher than for the same period last year. It has provided insurance services to around 143,000 Chinese enterprises, up 27 percent year-on-year.

Cai said Chinese companies should attach greater importance to risk management and control and strengthen the identification of risks in the future.

Yin Yanhui, assistant president of Sinosure, said Chinese companies should make good use of credit insurance-related services to avoid the systemic risks that could lead to the failure of an enterprise.