The Motivation Of Chinese Entrepreneurs To Invest In Lao PDR (Case: Lao PDR Toward Neighboring Countries)

Since Lao government launched the New Economic Mechanism which transformed from the command economy to a market economy and also joined the ASEAN, AFTA and is going to be a WTO member, Laos is apparently becoming more and more attractive to both the domestic and foreign investors. Good performance in the investment areas in recent years has led to rapid increase in foreign investments especially from neighboring countries such as China, Thailand and Vietnam.The core of this research is to focus on the key factors that attract the Chinese investors to invest in Laos. The research is mainly conducted by distributing questionnaires to Chinese companies and the total sample used in analysis is 134 which include Agriculture 29, Industry 26, Mining 40, Hotel & Restaurant 12, Consultant 3, Construction 05, and Investment & Trading 19. The questionnaire is divided into four parts: general information, investment environment, the key factors that motivate Chinese investors and open-ended questions. The statistical analysis tool used is the SPSS version 11.5 and the arithmetic mean (average), percentage and standard deviation are analyzed. The questionnaire design and analysis are based on the relevant theories of National advantage, global strategies, five competitive forces model and SWOT analysis.In conclusion, the outcome of this research showed that the factors which attract Chinese investors most are raw materials, competitive environment, political and social factors and neighboring locations and market size is a less attractive factor. In addition, the open-added questions demonstrated that the political and social stability and new market opportunities are the factors can be both opportunities and threats. The big obstacles the investors face are the shortage of skilled labors and barriers from government regulation. Meanwhile, it illustrated that the transportation infrastructure needs to be improved and red tapes should be eliminated. In the future, good relationship between Laos and China will be more attractive and may provide more opportunities for Chinese investors to invest in Laos.