Research On The Influence Of OFDI On China's Overcapacity

With the rapid development of global economic integration,“going out” has entered a new stage.China's foreign trade and investment have occupied the international market with greater advantages.Under such a circumstance,faced with the increasingly severe overcapacity in China,it is a better way to use the international market,promote international capacity cooperation,and use outward foreign direct investment to drive the export and transfer of excess production capacity in China.This paper first uses the descriptive statistical analysis method to analyze the direct foreign investment situation in China as a whole and provinces(municipalities)from 2003 to 2016 in terms of investment scale,investment region and investment industry.Combining the development of China's outward foreign direct investment in recent years,relevant data from 30 provinces(municipalities)have been selected.The co-integration method has been used to calculate the capacity utilization rate of these provinces(municipalities)from 2001 to 2015 and analyzed China's Overcapacity status characteristics.Considering capacity utilization as an indicator of China's overcapacity,the lower the capacity utilization,the more severe the overcapacity in China.At the same time,from the perspective of OFDI,this paper uses the export trade effect,reverse technology spillover effect,and domestic investment substitution effect to analyze the impact mechanism of OFDI on excess production capacity from the perspective of investment motivation.This lays the foundation for the data and theoretical analysis for the empirical research in the following.Due to the availability of data,this paper selects the capacity utilization rate and outward foreign direct investment data of 27 provinces and cities from 2004 to 2015,and constructs panel data using empirical analysis to analyze the relationship between outward foreign direct investment and capacity utilization.From the national level and the regional level,the impact of OFDI on capacity utilization is empirically tested,and a more significant test result is obtained.From the perspective of the overall regression at the national level,OFDI has a positive effect on capacity utilization,butOFDI is not the only factor affecting capacity utilization.From the perspective of the regional level,foreign direct investment in different regions has different effects on capacity utilization.Then according to the results of empirical analysis,the paper puts forward following three suggestions to resolve excess capacity.First,we should increase the direct investment in the countries along the “One Belt and One Road”and manufacturing industry to realize the "capital and production capacity" double output and further strengthen the international investment cooperation,promote the international capacity cooperation to resolve excess capacity.Then,we should make different investment policies in different regions.Last,we should improve the policy support system of outward foreign direct investment and overseas transfer of production capacity,and make use of outward foreign direct investment to resolve excess capacity better.