The Research Of Economic Factors Influencing The Overseas Direct Investment From Chinese Manufacturing Industry

Economic globalization created by multinational corporations is sweeping acrossthe various economies of the world. Manufacturing industry is the mainstay of ournational economy and facing some problems including overcapacity, technologicalbackwardness and irrational industrial structure in its development along with thecontinuous improvement of its scale and quality. The only solution for china’smanufacturing industry is to carry out foreign direct investment and this measure canalso help china’s manufacturing companies become global giants and to participate ininternational division of labor.Through the analysis of foreign direct investment theory, the theoretical factorsaffecting investment and the current situation of manufacturing enterprises’ foreigndirect investment, this paper can have a comprehensive understanding of variouspossible domestic and foreign economic factors influencing the foreign directinvestment of China’s manufacturing industry. By using empirical research this papercan tell whether an how much these possible economic factors can influence theforeign direct investment of China’s manufacturing industry. We can conclude that:(1)The great effect of Chinese manufacturing industry’s wage level,the resourceendowment and market size of the host country can reflect that the overseas directinvestment from china has production oriented and market oriented.(2)Thecomplementary effect between the export and the overseas direct investment from Chinese manufacturing industry is much higher than the substitution effect.This canreflect the trend of upgrading industrial structure based on marginal industriesmigration.(3)From the positive influence of the exchange rate of RMB we know thatthe appreciation of the RMB has actually improved the ability of overseas directinvestment.(4)The level of the host country’s interest rates and technologies has noobvious effects on the overseas direct investment means Chinese manufacturingindustry is in low level of internationalization and lack experience of overseas directinvestment.According to the research conclusion, this paper put forward someconstructive suggestions based on both the government and the industryperspectives...