Research On Relevancy Between China And ASEAN On FDI Attraction

China in recent years has emerged as one of the largest recipients of foreign direct investment (FDI) in the world. Many analysts and government officials in the ASEAN have increasingly expressed concerns that China is diverting FDI from some countries of ASEAN, which reduces FDI flows to ASEAN. This article focuses on China and ASEAN and analyzes the Decisive factors of FDI and effect between China and ASEAN on FDI attraction to test whether China diverting FDI from ASEAN assuming the elastic supply of FDI. The results are the flow of China's FDI is positively related to the levels of inward direct investments of economies in ASEAN and the Decisive Factors of location is different to various type of FDI. It is not competitive between China and ASEAN in attracting market seeking, efficiency seeking and strategic asset seeking FDI except resource seeking FDI. Therefore it does not divert FDI from each other on FDI attraction. In the background of China-ASEAN Free Trade Area, China and ASEAN should cooperate to improve the investment environment and strengthen the competitiveness of the whole area.This collects and processes the theoretical and empirical research concerning FDI, and then masters and presents the origin and explanation of the problem using for reference of the theoretical framework of former scholar. Direct statistic analysis is used to show the situation of FDI flow to China and ASEAN by source country and host industry. This also builds model and analyzes the results to estimate the effect between China and ASEAN on FDI attraction based on Empirical Analysis. Finally normative analysis is used to explore cooperative prospects and measures among China and ASEAN.