Study Of Economic Influence Factors Of China's And Japan's OFDI To ASEAN

With the development of world regional economic cooperation,Association of Southeast Asian Nations(ASEAN),Asia's largest economic entity,is playing an important role in Asia Pacific region.ASEAN is also attracting the direct investment from its neighbors for its rich natural resources and vast investment market.Under the One Belt And One Road strategy,ASEAN has become China's most important partner in Southeast Asia area.Since the establishment of diplomatic ties in 1991,China's direct investment to ASEAN maintained a high growth rate.However,both the stock and flow of China's OFDI to ASEAN are still lags far behind Japan.Thus comparing the economic influence factors of both nations' OFDI to ASEAN and putting forward suggestions to China's OFDI to ASEAN accordingly has become an urgent problem to Chinese government.According to relevant theories of foreign direct investment,this paper divides the economic influence factors as enterprises' factors and macroeconomic factors.Based on the current condition of China's and Japan's OFDI to ASEAN,and correlational researches on the influence factors of both nations' OFDI to ASEAN,this paper then selects both nations' GDP,value of export to ASEAN,average wage,R&D expenditure and exchange rate as influence factors that might influence their OFDI to ASEAN.The empirical analysis shows that China's GDP and exchange rate have significant positive influence while the value of export has significant negative influence to China's OFDI to ASEAN,and Japan's R&D expenditure and export have significant positive influence to its OFDI to ASEAN,which means that China's advantage mainly comes from the macroeconomic factors while Japan's advantages mainly comes from enterprise factors.Thus,although China's level of economic has created a favorable investment environment for Chinese enterprises,these corporations' low technical level and export competitive industrial structures are impeding their investment to ASEAN.In the future,Chinese government and multinational corporations should not only pay attention to the growth of the amount of investment,but also focus on the improvement of the quality of investment.This paper then puts forward four suggestions for China to promote its OFDI to ASEAN accordingly.Firstly,China should upgrade the industrial structure with ASEAN.By increasing the investment to capital and technology intensive industries,and promoting the investment on emerging industries such as energy-saving,new energy vehicles and high-speed rail industries,Chinese enterprises will develop their own competitive advantages in ASEAN market.Secondly,China should optimize the financial investment environment withASEAN.To meet this goal,Chinese government should strengthen the support to the small and medium-sized enterprises' investment to ASEAN by improving the financing environment and information systems of these SMEs.Thirdly,China should expand the investment distribution in ASEAN by boostingthe investment in more developed nations like Singapore,Malaysia and Indonesia.To gain more profit from the direct investment to ASEAN,China's investment should also match up with the policies,resources and industry structures of each country.Last but not least,Chinese government should improve the policy system onOFDI to ASEAN by perfecting domestic legal protection system for oversea investment and developing a legally binding agreement with ASEAN.