Research On The Influencing Factors Of China’s Foreign Direct Investment In RCEP Countries

Since the reform and opening up,China’s economic development has achieved remarkable results,and it has now become the world’s second largest economy.Foreign capital has made great contributions to the China’s economic take-off.With the strengthening of economic power,the pace of "going out" of Chinese enterprises has accelerated markedly since the beginning of the new century.Especially after the international financial crisis,China’s foreign direct investment has been maintaining the trend of reverse growth.Under the background of economic globalization,investment from China has become an important force for promoting economic growth in all countries,including developed countries.The Belt and Road initiative is a new strategy for China’s opening up,which aims at mutual benefit and win-win progress.Since its inception,China’s foreign direct investment in countries along the route has grown rapidly.For now,China is a big outward foreign direct investment power in the world.The RCEP is led by ASEAN which is expected to conclude negotiations in 2018,and investment is an important part of this free trade agreement negotiation.RCEP countries have close economic cooperation with China and most of them are located within the scope of the "Belt and Road Initiative".The successful negotiation of RCEP will have a great impact on the foreign direct investment between China and RCEP countries.This thesis reviews relevant literature,classic theories,and motivations of foreign direct investment,and elaborates on the characteristics of China’s foreign direct investment in RCEP countries.Based on the panel data of China’s foreign direct investment to 11 countries in RCEP from 2003 to 2016,this thesis constructs a fixed effect regression model,and empirically analyzes the factors that influence China’s foreign direct investment in RCEP countries from multiple aspects.The results show that:China has certain market-seeking motives for foreign direct investment in RCEP countries;Strategic asset-seeking and efficiency-seeking characteristics are not obvious;the motivations for natural resources such as oil and gas,minerals,etc.are very significant.It also shows that there is great potential for China’s development in foreign direct investment to RCEP countries.The host country’s infrastructure has significant impact on China’s foreign direct investment in RCEP countries.It means that the higher the level of infrastructure in the host country,the more investment it draws from China.China’s economic development also has significant impact on China’s foreign investment,and its growing economic power is an important driving force for the growth of china’s foreign direct investment.Besides,The quality of the host country’s system also has a significant role in promoting China’s foreign direct investment.Therefore,China’s foreign direct investment in RCEP countries tends to the economies with better system quality.The host country’s investment freedom,inflation rate,and the proportion of import from China to its total imports have no significant effect on China’s foreign direct investment.