The Influence Of Bilateral Political Relations On Bilateral Investment

Since the beginning of the 21 st century,the global economic structure has undergone profound changes.China has now become the world's second largest economy and the largest developing country.The correlation between bilateral political relations and national economic development is getting closer.Therefore,based on the theoretical results of international political theory,international relations and international investment,this paper explores the influence of China's foreign political relations on bilateral investment in the context of the increasingly close political and economic relations between different countries.Based on the panel data between China and 12 countries,this paper establishes a multi-panel regression analysis model.The study found that: First,in terms of the foreign direct investment in China,the friendly political relationship between China and the other country is beneficial to China to attract foreign direct investment as a whole,but this favorable influence is more obvious in the political relations with developing countries.Second,in terms of China's outward foreign direct investment,bilateral political relations between countries have a significant role in promoting China's foreign direct investment.Whether it is a developing country or a developed country,friendly political relations have a significant positive effect on promoting China's foreign direct investment.And this positive promotion is relatively more pronounced in political relations with developing countries.Third,China's foreign direct investment(OFDI)is affected by bilateral political relations more than the foreign direct capital(FDI).According to the results of empirical research,this paper proposes the following policy recommendations: Firstly,strengthen political relations with developing countries,and develop a new model of economic development that is mutually beneficial and win-win.Secondly,strengthen cooperation with developing countries in the international political arena,actively participate in global economic governance.Thirdly,actively establish or improve political relations with developed countries,create a peaceful and friendly development environment for China's economic development.Fourthly,accelerate the improvement of investment laws and regulations,and improve the confidence of foreign direct investment in China.In addition,in the practice of foreign investment,we must improve the competitiveness of our multinational enterprises in the international investment market.