The ongoing European debt crisis may have stopped China's sovereign wealth fund from investing in government bonds from the continent, but it will seek other high-return projects there.

China Investment Corp, the country's sovereign wealth fund with about $410 billion in assets, has taken a cautious approach to Europe since the debt crisis erupted three years ago.

"Although we don't want to buy any more government bonds, we are still seeking investment opportunities in Europe," CIC President Gao Xiqing said at a forum in Addis Ababa, Ethiopia.

Now it is too risky for China, which holds the world's biggest foreign exchange reserves, to increase its stock of European government bonds, as Spain may become another hot spot of the debt crisis and further deteriorate the situation, said Wang Tianlong, an economist with the China Center for International Economic Exchanges, a government think tank.

The European sovereign debt crisis may expand into its banking system and further influence the global financial market, which is likely to lead to a long-term global economic downturn, according to a report from the think tank.

"A more efficient and safe way to use the country's large amount of foreign reserves is to invest in infrastructure construction projects in Europe, such as highways and railways," Wang said.

According to the CIC president, the central government has injected about $50 billion in the fund amid plans to diversify worldwide investment projects.

Last week, CIC signed an agreement with Belgium's Federal Holding and Investment Company in Brussels to launch the China-Belgium Mirror Fund, a mutual fund to help Chinese companies expand their investment in all 27 EU member countries.

Meanwhile, the sovereign wealth fund is keen to boost investment in Africa.

"We are only considering projects of at least $100 million in African companies and the lowest expected stake is 10 percent," said Gao.

Contact the writer at chenjia1@chinadaily.com.cn