The Motivation And Changing Tendency Of The Location Choice Of China's Outward Foreign Direct Investment

In 2014,President Xi proposed that the “new normal” of China's economy indicates that the economy will shift from a pulling factor of production factors to an innovation-driven trend,and that technological superiority will influence the international division of labor in the future.At present,the domestic industrial structure urgently needs to be upgraded and transformed.Innovation is the core.Due to the slow development of many domestic research and technology,looking for a suitable country for learning as a tutor,standing on the shoulders of giants can promote technological progress.However,in the past,China Outward Foreign Direct Investment(OFDI)mainly aims at obtaining energy resources or avoiding high-cost taxes.The focuses of OFDI are mainly distributed in Asia,Latin America and Africa,with investment in developed countries The proportion of lower.In order to transform the economic structure under the macroscopic background of international economic integration,it is necessary to pay attention to the research and analysis on the participation of domestic enterprises in international economic activities.Attracting foreign capital and merchandise trade are the main ways for China to participate in international activities since its opening to the outside world.However,for the domestic needs of optimizing the industrial structure,fiercely competing for global resources and the tension in geopolitical relations,the introduction of resources needs echoing the enterprises to go out at the same time.At the theoretical level,enterprises are established in technologically advanced areas that have the advantage of gaining knowledge from the outflow,and improve economic efficiency through technological advantages.The theory still needs to be tested by practice.Due to the limitation oftechnology absorptive capacity and learning curve,most scholars have argued that OFDI does not play a significant role in promoting China's current economic growth.However,it does not deny the effect of OFDI on domestic technological progress.At present,our country is in short supply of technology,so we need to strengthen the learning effect.We can obtain faster and more effective technological upgrading through transnational operations such as foreign potential mergers and acquisitions,joint ventures and mergers.At the same time,the enterprises themselves need to consider the estimation of the absorptive capacity of advanced technologies.This paper intercepts the 33 countries(regions)with the most advanced OFDI stocks in China from 2003 to 2015 and divides them into three major regions:developed countries,developing countries and emerging economies,and applies the gradual culling method to compare 2003-2007 with the periods of 2008-2015,the comparative study will affect the choice of location for China's direct investment in these three regions.The conclusion of the study shows that in different macroeconomic contexts,domestic enterprises show differences in the choice of host countries.Factors such as the intimacy of bilateral trade,the low-skilled labor force and abundant resources in developing countries,the consumer market in developed countries,the market economy environment in emerging economies,infrastructures and bilateral trade and other factors have made a significant contribution to the direct investment by domestic enterprises in overseas markets during 2003-2007.However,during 2008-2015,there are mainly local infrastructure,low-skilled and highly skilled workforce in developing countries,for developed countries which depend on the clean government level and a stable economic environment and advanced technology,for the emerging economy which depend on the technical level,in addition to,other factors may be influence domestic enterprises on location choice of outward foreign direct investment.The empirical results based on the changes of China's OFDI selections have a similar trend with the contents set out in the Statistical Bulletin on Foreign DirectInvestment in 2016,and the distribution of domestic transnational enterprises in the future will increase the distribution in developed regions.Advanced technology,highly skilled workforce and local infrastructure will be the key factors in the future investment decisions of enterprises.OFDI is one of the ways for domestic cross-border enterprises to transform and innovate.It uses the advantages of host countries to achieve effective exchanges of advanced technologies and management experience.Location selection is the basis for achieving goals and requires careful selection.