Overseas investment by Chinese state-owned capital has special meanings，including securing the nation’s energy and natural resources，upgrading low value-added industries，implementing “One Belt，One Road” initiation，increasing state asset value and promoting Chinese brand image. Currently，Chinese state-owned capital mainly invests in areas of energy，finance，transportation and real estate，concentrating on regions of Southeast Asia，Mid-and-South Asia，and Middle East. High failure rate is a prominent problem of overseas investment conducted by state-owned capital. The main risks include huge debt risk due to improper decisions，protection risks from foreign governments，state asset loss due to poor supervision，resource consolidation risk because of poor management，slow approvals due to rigid organization，and operating interruption because of wars and conflicts. Government and state-owned enterprises should pay attention to the following aspects to improve risk aversion capability during overseas investment：1.conducting thorough investigation before decisions are maid；2.increasing supervision of higher level managers；3.increasing the capability of managing public relations；4.improving management capability in post-investment stage；5.increasing approval efficiency；and 6.building warning system to protect firms from wars and conflicts.