The Influance Factors Of China’s FDI To ASEAN

With the continuous development of the economic globalization and regionalintegration, outward foreign direct investment is becoming an important factor thataffects the regional economic development. Owing to the deterioration of themacroeconomic situation and the disorders of the global financial system, FDI flowsinto the developed economies are decreasing, while those to developing countriesmaintain a sustained growth momentum. In recent years, China’s OFDI is growingvery quickly. As the world’s largest developing country, China has ranked as theworld’s third largest foreign investor for two consecutive years after the UnitedStates and Japan. All indicates that China has become a great foreign investor insteadof a destination of FDI, On the other hand, as China’s demographic dividend isgradually disappearing, the ASEAN countries with rich natural resources, cheaplabor and huge market scale are attracting the attention from more and more Chineseenterprises.This article first systematically presented the international direct investmenttheories and the theories of foreign investment in developing countries. And theauthor has carried out the theoretical research on China’s direct investment toASEAN. On this basis, the author, according to the actual situation of China’sinvestment in ASEAN, carefully selected the economic scale of the investor, themarket scale of the host country, the relative labor cost o f the host country, the exportintensity between the foreign investor and the host country and the distance betweentwo countries’ economic centers as influence factors of China’s direct investment toASEAN. Then, the author described the current situation of China’s directinvestment to ASEAN from different perspectives to explain what lead to the currentinvestment distribution pattern. Finally, the author carried out the empirical analysison influence factors of China’s direct investment toward ASEAN. With thetheoretical analysis and empirical research, this paper gets the following conclusion:(1)The scale of China’s economy has great promoting effects on China’s OFDI.In recent years, the rapid growth of China’s foreign direct investment is mainlybecause of the rapid development of China’s economy;(2) the host country which has more obvious location advantages (including large market scale, low labor cost,and low transport cost because of close geographical distance), attracts more Chinesedirect investment;(3) the closer the export relations between China and the hostcountry is, the more direct investment flows into the host country. China’sinvestment in ASEAN and its exports are thus complementary.These conclusions can provide scientific theoretical basis for policy making. Atlast, this paper put forward some policy suggestions to promote China’s directinvestment to ASEAN, as well as to promote bilateral cooperation and achieve thewin-win situation.