Study On The Effects Of Chinese Outward Direct Investment On Its Industrial Structure Adjustment

As a main part of Chinese going out strategy, outward direct investment (ODI) is growing rapidly though starting late. China has become a significant source of direct investment, whose unique economic characteristics will spur it to invest overseas continuously in the future. ODI certainly will affect the economy of the home country. This study is focused on its effects on industrial structure adjustment, which mainly intends to analyze the influencing mechanism and actual effects of Chinese ODI on its industrial structure adjustment, and put forward some suggestions for China to develop ODI better. The research mostly spreads from the next five aspects.Firstly, foreign and domestic theoretical and empirical studies are summarized including the incentives and effects of ODI, their reference meaning and deficiency are also pointed out, which are served as the theoretical basis of the following studies.Secondly, based on time serial and cross section data, the history of Chinese ODI is studied; the actuality and characteristics are also analyzed from the angle of investing scale, industry, location, main body, and mode. According to the principle of gray incidence and gray clustering, the main variables which influence the size of Chinese ODI are studied. A forecast is then made on the scale of outward investment in the next five years based on the regression result and the metabolic GM (1, 1) model, which indicates the strong increasing tendency of Chinese ODI and the meaning of this research.Thirdly, a basic theoretical frame is set up based on Chinese typical investing motivation, which is used to analyze the influencing mechanism of Chinese ODI on its industrial structure adjustment. The mechanism of ODI leading to industry hollowing-out is also examined. The results show that all four kinds of ODI, i.e. market seeking, natural resources seeking, technology seeking, and strategic assets seeking ODI, can step up the industrial structure of the home country in different ways, and the hollowing-out problem is unnecessarily to be worried about at present, which implies that ODI can act as an effective way to upgrade the industrial structure of the investing country.Fourthly, two empirical studies are carried out to examine the effects and influencing routes of Chinese ODI on its industrial structure adjustment. The first empirical study is done on the relationship between Chinese ODI and the industrial structure adjustment, which shows that ODI promotes the optimization of the industrial structure. Then through appropriate conducting variables, the second empirical study is executed to analyze the paths of ODI upgrading the industrial structure, which shows that ODI influences Chinese industrial structure mainly through export creation, reverse technology spillover, and capturing natural resources.Finally, bases on the empirical results, it is pointed out that importance should be attached to industry and location choice established in China's economic development of itself, so as to enhance the promoting effect of ODI on its industrial structure optimization.