China's Research On Direct Investment Industry Selection In Latin America

With the development of economic globalization, the policy of going out has implemented increasingly, and foreign direct investment has become an important effect in promoting Chinese economic development. As Chinese second largest FDI destination, Latin America is meaningful and valuable to research. Then, the study of the industry selection of direct investment in Latin America will be an important reference guide to help businesses to find better opportunities and avoid risks in Latin America.This paper referred to the relevant theories, and it combined with the case of Chinese enterprises making direct investment in Latin America. Under the context of economic globalization, the focus of analysis and research is the industry selection of direct investment in Latin America. It includes the investment background, geographical distribution, industrial distribution, and investment manners, competitive industries and the existing problems.Chinese foreign direct investment stock in Latin America was 106.11 billion dollars in 2014, 12% of the total foreign direct investment. At present, China direct investment in Latin America is mainly concentrated in leasing and business services, energy sector, mining industry and several other industries, and it was focused on two offshore financial centers, which are the British Virgin Islands and the Cayman Islands. In addition, the main countries are Brazil, Mexico, Venezuela, Colombia, Argentina, Chile, Peru, Costa Rica, Ecuador, etc, which economies are more developed in Latin American. Now the advantage industries of our country are power industry, automotive industry, steel industry, communications industry, construction machinery industry, and these industries are also the main focus of the industry in Chinese foreign direct investmentThe empirical part selects the 12 years of panel data from 2003 to 2014. We use the gravity model analysis seven countries, they are Brazil, Mexico, Argentina, Chile, Peru, Venezuela, Colombia, which are nice trade cooperators with China. We want to know the relationship between the direct investment and the trade. The results show that the scale of industry selection of direct investment has significantly promoted the exports from China to Latin America. Using distributed lag model to analyze the impact of direct investment in Latin America for Chinese domestic industrial structure. Unfortunately, due to the direct investment to Latin America industrial is small, the empirical result is not significant deposit into or hinder, and their relationship is low.The last part of the thesis is based on the foregoing analysis, the author give advices about China to expand the direct investment in Latin America. The suggestions from the government level, industry level and enterprise level.