The Research On Financial Risks And Its Influencing Factors Of China's Direct Investment In ASEAN Countries

Under the background of the full implementation of "The Belt and Road"strategy and the cooperation of CAFTA,the scale of China's direct investment in ASEAN has continued to grow and the industry distribution has gradually expanded.However,due to the host country's special floating exchange rate system and exchange restrictions,excessive reliance on external funds,and lack of risk sharing and compensation mechanisms,foreign exchange risks,credit risks,financial system risks and other financial risks exist in the process of China's foreign direct investment.ASEAN is the second largest economy invested by China's foreign direct investment,it has certain practical significance for its research on financial risks.At present,there are few studies on China's direct investment in ASEAN financial risks and its management.Therefore,the analysis of the impact of various risk factors on OFDI traffic and related risk management recommendations have important theoretical and practical significance for Chinese companies' direct investment activities in ASEAN countries.This article is divided into five parts:The first part is introduction.It mainly introduces the background and significance of this topic,the research status at home and abroad,the content and methods of the research,as well as the innovations and deficiencies of this article.The second part analyzes the risk and management theory of outward foreign direct investment.The theory of international direct investment,financial risks and the theory of international investment risk management are summarized and elaborated to provide theoretical support for subsequent research.The third part is the current situation and financial risks of China's direct investment in ASEAN.Through related data,the current situation of China's direct investment in ASEAN was analyzed from three aspects:investment scale,country distribution,and industry distribution.And use the foreign direct investment performance index to examine the efficiency of China's direct investment in ASEAN countries.Based on these,the financial risks that Chinese cross-border investment companies currently facing are analyzed in detail.The four major financial risks are foreign exchange risk,interest rates risk,credit risk and financial system risk.In view of the financial risks that currently exist,the four types of financial risks in China's direct investment in ASEAN are discussed in detail.The fourth part is the empirical analysis of the factors influencing the financial risk of China's direct investment in ASEAN.Using panel data to establish a fixed-effect model for regression analysis,to analysis and test the four types of risk factors that affect China's direct investment in ASEAN,and then find the degree of impact of these four risk factors on China's OFDI to ASEAN.The fifth part is the conclusion and recommendations.According to the empirical results,more specific policy recommendations are made on the management of foreign exchange risks,credit risks and financial system risks in relation to major risk factors.This paper examines the financial risks(including foreign exchange risk,interest rate risk,credit risk,and financial system risk)and causes of cross-border investment companies under the current situation of China's growing direct investment in ASEAN and the uneven distribution of countries and industries.Analyze and establish a panel fixed effect model to study,analyze the impact of various risk factors on China's OFDI flow to ASEAN,the empirical results show that foreign exchange risk,credit risk and national financial risk have significant effects on direct investment flows,while interest rate risk has not had a significant impact.finally accordantly put forward some specific recommendations as follows:improving the foreign direct investment RMB settlement system,improving the overseas investment insurance system,and strengthening financial cooperation with the host country.The innovation of this paper is:in the context of the "The Belt and Road Initiative",comprehensively analyzes the financial risks and its prominent influencing factors,and proposed more targeted risk management recommendations,in terms of research perspective and content has a certain degree of innovation.