Impact Of High-ranking Officials' Visit On China's Outward FDI

As "the Belt and Road" Initiative was put forward,China's outward foreign direct investment to the above area has witnessed a steady growth.However,for domestic enterprises,to implement the "Go-Out policy" still meets the predicament.On the one hand,due to the huge differences in ideology and system homogeneity,as well as the wrong interpretation of some governments and media,the international awareness of "the Belt and the Road" is not clear enough.Many countries still have some doubts about China's strategic intentions and are hesitant to participate in this international cooperation.On the other hand,unstable political environment,improving legal system and poor investment environment in most countries in the area increase the cost and risk of enterprises' overseas investment.These difficulties need the government rather than the company to overcome.As the most typical diplomatic activity,high-ranking officials' visit can not only enhance the mutual political trust and deepen friendship and mutual understanding between two peoples,but negotiate for more investment opportunity and institutional protection in the host country as well.So I suppose that high-ranking officials' visit should help multinational companies enter overseas market,which at last enlarge the scale of outward foreign direct investment.Firstly,review and summarize.Find out the factors influencing OFDI that were already proved in the existing literature,including bilateral political relation and other economic factors.Then with neoliberal institutionalism as theoretical basis,this paper sums up two affection paths about how high level visits influence ODFI:the diffusion of political rights and the deepening of mutual understanding.Secondly,report China's investment to "the Belt and Road" in recent years from overall scale,region distribution and industry distribution.In the empirical research,based on the extension of investment gravity model,this paper analyzes the impact of high level visits on OFDI by using Chinese investment panel data towards 39 countries from 2010 to 2018.Main conclusions are as follows:high level visits do have a significant positive influence on China's OFDI;the effect from Chinese officials' visits to other countries in the area is significant,but visits of foreign heads to China don't have a significant effect;further,it's found that the visits of Chinese president and premier don't have a significant positive effect,while there is a significant positive correlation between Chinese other high level officials' visits and China's OFDI.Finally,this paper suggests how to win more international recognition for "the Belt and Road" Initiative and promote the investment increase to the area by making good use of our diplomatic resources and optimizing the diplomatic structure according to the above analysis.