The Impact Of Bilateral Investment Agreements On China’s Outward Foreign Investment

With the rapid development of China’s economy, outward foreign investment is also growing rapidly, and the number of bilateral investment agreements signed by China is also increasing. In order to explore whether the bilateral investment agreements signed by our country can promote the outward investment. This paper, based on the existing literature, combined with the gravity model to analyze the problem with empirical analysis.In the empirical part, this paper use panel data covers 59 countries over the period 2003-2012, China’s outward investment flow data to the specific country is interpreted as explained variable, bit as the core explanatory variables, GDP, the scale of trade, exchange rate, institutional factors, consumer price index as control variables. After controlling the possible endogenous problem, this paper uses GMM model to find:First, China signed a BIT can significantly promote the investment to the signatories, and trade size and the consumer price index also significantly promotes the Chinese outward foreign direct investment, GDP is significant negative impact. Second, the sample of 59 countries further divided into developed and developing countries for inspection, found that the coefficients of the bit are significantly positive, shows that whether it is with developed and developing countries sign bit is conducive to the promotion of foreign investment of China. At the same time, the BIT coefficient of the developed countries is obviously higher than that of the developing countries, which indicates that BIT can promote the foreign investment more in the developed countries.Then, combined with the current focus of Sino-us BIT negotiations, analyzes the present situation of Chinese investment and difficult in the US, and further analyzes the differences in Sino-us BIT negotiations:pre-establishment national treatment, free capital transfer, state-owned enterprises, national security review on foreign investment, labor and environmental problems, etc.Finally, based on the previous analysis and empirical results to Chinese policy makers put forward policy Suggestions:actively strive for a BIT more, promote the achievement of Sino-US BIT negotiation, improve the terms of the existing BITs, pay attention to the renewal or sign again with the due treatment and domestic reforms.