Research On The Impact Of Economic Policy Uncertainty On China's Foreign Direct Investment

In recent years,with the accelerated pace of "going global" of Chinese enterprises,China's foreign direct investment has also made tremendous progress.According to the Statistical Bulletin of China's Foreign Direct Investment published by the Ministry of Commerce over the past years,China's foreign direct investment has achieved a qualitative leap since 2003,with the investment flow increasing from$2.9 billion in 2003 to $158.29 billion in 2017.According to the information released by the Ministry of Commerce in 2019,China's international direct investment in the whole industry in 2018 totaled 129.83 billion US dollars.Under the complex international situation,China's foreign direct investment maintained a relatively stable development.In contrast,since the 2008 financial crisis,the world's economies have not only weakened their own stability,but also faced a more complex external economic environment.This situation of internal and external difficulties has prompted the world to introduce economic policies frequently,further deepening the uncertainty of global economic policies.In this context,a thorough study of the relationship between China's foreign direct investment and economic policy uncertainty can provide a new perspective for explaining the current situation of China's foreign direct investment,and has important theoretical and practical significance for improving the previous economic development model of relying on export trade to open up international markets.This paper is divided into five parts.The first part summarizes the background,literature review and research content of the paper;the second part analyses the uncertainty of economic policy and the current situation of China's foreign direct investment;the third part analyses the influence mechanism of the uncertainty of economic policy on China's foreign direct investment from different angles;the fourth part is an empirical analysis,which is put forward in the paper from the macro and micro levels.The fifth part is the conclusion and Enlightenment of the study.In view of the impact of uncertainties in economic policy on China's foreign direct investment,this paper makes a study from two aspects: theoretical analysis and empirical test.The results show that:(1)China's outward FDI is positively correlated with domestic economic policy uncertainty and negatively correlated with foreign economic policy uncertainty;(2)China's outward FDI is positively correlated withbilateral economic policy uncertainty,and more likely to flow to countries with lower economic policy uncertainty than China's;(2)Under the different investment motivation,China's attitude toward avoiding risks caused by uncertainties in economic policies is different.Among them,market-seeking FDI and technology-seeking FDI are greatly affected by the uncertainty of domestic and foreign economic policies,while resource-seeking FDI is less sensitive to the risks brought about by the uncertainty of foreign economic policies;(3)The impact of foreign economic policy uncertainty on FDI varies from country to country,among which it is to developing countries and new ones.The impact of direct investment in emerging market economies is positive,while the impact on direct investment to developed countries is negative.Under the background of increasing uncertainty of global economic policy,it is of great significance to study the impact of uncertainty of economic policy on China's foreign direct investment(FDI)in order to promote China's foreign direct investment(FDI)and form a new pattern of opening up.