Chinese investments into conflict-ridden Sudan and South Sudan are vulnerable because the two countries are on the brink of a war, and have become a critical test for China's overseas investment strategy and foreign policy.

Before South Sudan seceded from Sudan last year, Sudanese oil was mostly shipped to China, Malaysia and India. China bought around 40 percent of the country's 500,000 barrels a day of oil production, while Malaysia claimed 30 percent and India 25 percent.

Since the secession, China has become the largest buyer of South Sudan oil. The International Energy Agency said that last year China imported 260,000 barrels per day of crude from the two countries, Reuters reported.

Also, China has been a heavy investor in the oil-rich Sudans. Before Sudan was divided into two nations, China provided favorable-term loans to finance the pipelines and infrastructure that transfer the oil largely in the south. China's investment into Sudan began in the early 1990s.

The situation in the Sudans differs from China's involvement in Libya, where China has only contract-based projects. China has large stakes in Sudans' oil fields, pipelines and other oil projects, which entail long-term returns and a staggering amount of capital injection.

"If a war breaks out, Chinese investment will definitely suffer great losses," said Jiang Heng, vice researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

"It is obviously that China's interest in the region is basically driven by its pursuit of the region's abundant oil resources," she said. "But don't forget it is equally coupled with risks and peril."

China's business in Sudan has never been a breeze. Conflicts, clashes and kidnapping are rife in the region. The memory of reoccurring kidnapping of Chinese are still fresh. In late January, 29 Chinese workers were abducted by rebels in southern Sudan.

The oil field Heglig was the epicenter of the battle between the two neighboring countries. The Heglig region produced roughly half the national production, 50,000-55,000 barrels a day, according to a Wednesday report citing Sudanese officials.

The escalating tensions between the two neighbors have placed China at the center of global attention. As China is expected to play a more active role in settling the crisis and is urged to take a side, China's long-standing non-intervention policy is at a crossroads. The Chinese government must choose to either step up or continue treading water.

China has frank, sincere relationships with both the Sudanese government and the newly-elected South Sudanese government whilst avoiding inciting any displeasure from either side. China has a great deal of strategic interests in the region that are hard to relinquish.

Last month, South Sudanese President Salva Kiir visited Beijing and met with Chinese leaders including President Hu Jintao and Vice Premier Li Keqiang.

His visit had been expected to drum up support and invite investment from China. An issue high on the agenda is South Sudan's goal of obtaining help from China in exporting their deposits of oil without the use of the pipelines controlled by Sudan.

What concrete results came from Kiir's visit are unknown. Xinhua News Agency only reported that Hu Jintao called for both sides to return to the table and solve disputes through peaceful negotiation.

Analysts believe China has to be very careful in handling the relationship with South Sudan, as appearing too close will only upset the Sudanese government.

Despite the great success in inking deals in African countries such as Angola, China has been accused of playing little altruism when fulfilling its investment aspirations on the continent. Comparatively, Western countries are more adapt at addressing the local situation.

Western companies have relatively mature risk management systems, but Chinese companies are devoid of such platforms, Jiang said.

Jiang commented that China has put diplomacy with Western countries higher on the priority list while paying little heed to its handling of its relationship with conflicting regions, such as Sudan and Myanmar.

"It is time that China should rethink its policies with those regions," she said.