Research On Relevancy Between China And Southeast Asian Countries On FDI Attraction

The inflows of China's foreign direct investment (FDD have been rising from 1990s. Many government officials in Southeast Asian Countries have increasingly expressed concerns that China is diverting FDI from their countries. The statement of "China's Threat" arises spontaneously. Correct understanding on the influence of Chinese FDI inflows towards the Southeast Asian Countries would be helpful for the cooperation of Southeast Asian region.This article confirms that China isn't diverting FDI from the Southeast Asia Countries through quantitative inspection and qualitative analysis. Quantitative analysis is mainly adopting traditional trading gravity model on the foundation of forefather's theoretical research. The results are the inflow of China's FDI is positively related to the levels of inward direct investments of economies in Southeast Asian Countries and the Decisive Factors of location is different to various type of FDI. It is not competitive between China and Southeast Asian Countries 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. Finally, according to the present FDI situation of China and Southeast Asian countries, the article makes some policy suggestions that strengthen the regional ability of drawing capital.