Exploration On The Transformation Of China's Outward Foreign Direct Investment In Mining Industry Under Reconstruction Of Global Supply Chain

The trade friction between China and the United States in the past two years has brought about a shift in the global industrial chain,leading to the disruption and reconstruction of the global supply chain.As an important raw material for production,mineral resources are at the most upstream position in the supply chain,and it is also a part that China must consider when restructuring the global supply chain.Although China has abundant mineral resources,it cannot fully meet the needs of economic development.There is a gap between supply and demand,and it needs to be imported from other countries.Outward foreign direct investment comparing with obtaining various mineral resources through international trade,is more reliable in enhancing the long-term energy and resource security of a country.Since 2014,China's outward foreign direct investment in mining industry has experienced a significant decline in the scale and quantity.China is currently in a critical period of economic transformation,and the structure of mineral resource demand has begun to change,which has also brought transformation challenges to China's foreign investment in mining.Understanding the current state and mode of China's outward foreign direct investment in mining industry could provide important reference for solving the transformation of China's mining outward foreign investment.The choice of investment mode is often the first major factor that determines the success or failure of an investment.This article analyzes the advantages and disadvantages of each of the two modes by collecting data on Chinese greenfiled investment and cross-border mergers and acquisitions since 2003.By comparing the data,it is found that the main mode used in China's outward foreign direct investment in mining industry is the greenfield investment mode,and further studies on various factors have found that the geographic distance from the host country is the main factor affecting the choice of investment mode.Through research on investment efficiency,it is found that the economic level of the host country has a positive correlation with China's foreign investment,while labor cost and institutional distance have a negative correlation.In general,the net efficiency of China's foreign investment in mining is-36.3%,which is manifested as a state of underinvestment.From a sub-regional perspective,China has overinvested in Oceania,but underinvested in Asia,Africa,the Americas and EU.A study of 104 invested countries shows that China has overinvested in 17countries and underinvested in the remaining 87 countries.A study of special economic regions found that China's investment in the "Belt and Road" is insufficient,and a study of the country's rich cluster of strategic mineral resources found that China's investment level is also insufficient.In view of the current shortage of foreign direct investment in China's mining industry and the uneven distribution,this article suggests that the investment mode should be selected reasonably,the mining capital market should be fully utilized to allocate global resources,and investment along the "Belt and Road" should be strengthened to build mineral resources supply chain system with diversified supply.