A Comparative Study Of Foreign Direct Investment Between China And India

Since the 21 century,the Outward Foreign Direct Investment(OFDI)of the developing countries is growing rapidly.According to the World Investment Report 2015(WIR15),the OFDI was $1.23 trillion in the word in 2014,declining 16 percent from the $ 1.47 trillion in 2013.But the OFDI flow in developing countries is on the rise.The OFDI flow in developing countries grew by 22.8 percent year on year,increasing from $381 billion in 2013 to $468 billion in 2014,accounting for 38 percent of total global OFDI and reaching a new high.As the two developing countries in the BRICS-China and India,both have a large population,vast territory and abundant resources.The level of economic development between the two countries is similar,and both of them are actively exploring outward foreign direct investment.The total amount of China's OFDI respectively were $87.8 billion,$107.8 billion and $123 billion in 2012,2013 and 2014,while India reached $ 8.5 billion,$10.4 billion and $11.2 billion during the same period.Thus,the two countries are accelerating their pace of the OFDI.Although the overall size of the China is larger compared with India's OFDI in stock and flow,China's OFDI exists generally performance index,single industry structure,concentrated form of enterprise main body and other issues in the aspect of the investment position,industry structure and the main body form.Although the two countries have many similarities in many respects,they have different paths in the development of the OFDI,leading to the differences in the main body form of enterprise,industrial structure and strategic layout.In order to take a better way of OFDI,our country should learn the advantages of India's OFDI and adjust deficiencies in the industrial layout and industrial structure of outward foreign direct investment.This paper describes the background and significance of the topic,and ultimately determines the value of the thesis topic.Firstly,after reading lots of domestic and foreign literature,the author lists the relevant theories of the OFDI in developed countries,including the eclectic theory of international production,monopoly advantage theory,product life cycles theory,internalization theory and marginal industry expansion theory,as well as the theory of the OFDI in developing countries,including the small-scale technology theory of Wales,technology localization theory and technological innovation and industrial upgrading theory;Secondly,we can compare and analyze from four aspects of the OFDI between China and India,namely scale,location characteristics,industry structure and principal investor,and note the similarities and differences;Thirdly,we could analyze the development level and the economic effect of the OFDI of China and India by using the combination of theoretic analysis and empirical analysis,and we also could analyze the reasons of the differences between the two countries.In the end,this paper summarizes the difficulties and problems in the development of China's OFDI.Drawing on the experience of India,we could put forward reasonable suggestions to promote the rapid development of China's OFDI,so that these methods will contribute to adjust the industrial structure of China's OFDI,and upgrade the domestic industry structure,and further enhance Chinese economic growth.