The Research On The Relationship Between OFDI And Domestic Industry Upgrading In Belt And Road Initiative Country

The "Belt and Road Initiative" has been implemented for four years since its proposal in 2013.During this period,China is facing a "new normal" of rising labor costs and overcapacity in economic development.In order to solve the current economic situation,the country has put forward "supply-side reform" and other measures to transfer the domestic excess capacity and gradually complete the optimization and upgrading of industrial structure.However,how much impact has its implementation posed a great impact on the economic development of our country.Has the foreign direct investment in the countries along the route promoted the optimization and upgrading of the enterprise’s own structure,and has it also advanced the upgrading of China’s domestic industry?These questions will be answered in this article.First of all,the paper analyzes the current situation of industrial structure and the distribution of industrial structure in China,then analyzes the current situation of China’s OFDI under "Belt and Road",to obtain the characteristics of China’s direct investment in the countries along the route.Then it analyzes the influence of China’s OFDI under the background of "Belt and Road" on the domestic industrial upgrading,that is,industrial transfer effect,resource and market seeking effect,from a theoretical perspective.Then,through VAR model,we make an empirical analysis on the OFDI to countries along "Belt and Road" from 2004 to 2016 to study its impact on the upgrading of China’s industrial structure.In accordance with the World Bank’s criteria for the classification of high and low income levels,the countries along the route are divided into two types:middle and high income levels and middle and low income levels.Combined with regression analysis,the different impacts of direct investment on China’s domestic industrial upgrading in countries with different income levels have been examined.The results are as followed:Ⅰ.China’s foreign direct investment in countries along the route of "Belt and Road" has promoted China’s industrial upgrading;Ⅱ.China’s industrial upgrading will also turn accelerate China’s foreign direct investment in the countries along the route;Ⅲ.China plays an important role in the promotion of the relationship between the OFDI of the countries along the route and the upgrading of the domestic industry.