A Research On The Influencing Factors And Potentials Of China's Direct Investment In Central And Eastern Europe

The sixteen countries of Central and Eastern Europe and China enjoy strong economic complementarity and have broad prospects for bilateral economic cooperation.Since April2012,leaders of China and Central and Eastern European countries hold regular meetings to jointly draw a plan for prospects and future of mutual beneficial cooperation.In October 2013,China proposed “the Belt and Road” Initiative.Representing an important bond connecting the Eurasian continent,all the sixteen countries of Central and Eastern Europe are along the blueprint of “the Belt and Road” Initiative and thus take a prominent strategic position.China's increasing direct investment in the sixteen countries of Central and Eastern Europe is conducive to developing the bilateral trade and economic cooperation.First,this paper analyzes the status quo of China's direct investment in Central and Eastern Europe from perspectives of the history,scale and industry distribution.It is found that mainly driven by seeking market and strategical assets,China's direct investment in the sixteen countries of Central and Eastern Europe increases slowly and still maintains a small scale.Second,this paper analyzes the factors that may affect China's direct investment in the sixteen countries of Central and Eastern Europe from five aspects,including market size,infrastructure,human resources,etc.Then,based on the panel data of China's direct investment in Central and Eastern European countries from 2007 to 2017,a gravity model was built to empirically analyze the factors that influence China's direct investment in Central and Eastern European countries.It is found that the market size,human resource quality and economic openness of Central and Eastern Europe countries have a significant impact on China's direct investment and are positively correlated with China's direct investment.Infrastructure-related factors have a negative correlation with China's direct investment.The worse the infrastructure situation of Central and Eastern European countries is,the more likely it is to attract China's direct investment.At the same time,through the diachronic analysis of the trend of direct investment potential and the synchronic contrast of China's direct investment potential differences among different countries in Central andEastern Europe,it is found that China maintains a stable direct investment potential for Central and Eastern European countries.Countries with low direct investment potential also have obvious advantages in some respects,while countries with high direct investment potential may have disadvantages in some aspects.Finally,this paper proposes suggestions that may expand the scale of China's direct investment in the sixteen countries of Central and Eastern European and raise the levels of China's direct investment.In other words,it is advisable to improve infrastructure construction,encourage investment other sectors,strengthen trade exchanges,focus on cooperation in multiple fields,focus on differentiated investment and improve the service system for direct investment.