Study On The Industry Selection Of China's Direct Investment In ASEAN

In recent years,with the in-depth implementation of China's "going out" strategy,the Outward Foreign Direct Investment(OFDI)of China has developed rapidly.In particular,"The Belt and Road Initiative" has brought about more frequent economic and trade exchanges and mutual investment between China and Association of Southeast Asian Nations(ASEAN).However,in 2017,China's OFDI flow dropped sharply,the decline was 19.3 percent.Despite of the sluggish overall investment environment,China's direct investment to ASEAN has shown a strong momentum,with the investment flow increasing by 37.4% in 2017 year-on-year.And among the top 20 countries in the area of OFDI there are 7 Association of South-East Asian Nations(ASEAN)countries.From the point of view of industrial choice,China's foreign direct investment in finance is mainly distributed in the developed countries and regions,such as the United States and the European Union.The mining industry are mainly distributed in Australia and Russia.The leasing and business services,wholesale and retail trade are mainly distributed in Hong Kong,China and ASEAN.There are great difference between the China's OFDI to ASENA and others countries.Therefore,it is of great practical significance to explore the choice of China's industrial investment to ASEAN,which is conducive to the development of China's economy and the optimization of its industrial structure.This paper refers to some important viewpoints of relevant articles about China's OFDI.Firstly,the investment theories applicable to China's OFDI are sorted out from two perspectives at home and abroad,including influence factor and investment motive.Then it studies the characteristics of China's direct investment to ASEAN and the status of industrial selection,and makes an in-depth exploration and analysis of the existing problems.Next,an econometric model suitable for OFDI of developing countries is constructed.In combination with the industrial data of China's direct investment in ASEAN from 2007 to 2017 and other relevant data,an empirical test is conducted on it with the help of measurement methods such as RCA index,unit root test,co-integration test and fixed effect model.Finally,this paper get the conclusion through the studies of the influencing factors of China's choice of investment and industry in ASEAN from eight aspects: GDP and per capital national income of ASEAN,resource endowment and infrastructure construction of ASEAN,China's exports to ASEAN,China's GDP by industries,the bilateral exchange rate and the governance level of ASEAN.In this paper,it is found that the influence on OFDI flow of different industries of China to ASEAN which is affected by GDP of ASEAN,per capital national income of ASEAN,the resources endowment and infrastructure of ASEAN,China's exports to ASEAN,GDP by different industries of China,bilateral exchange rate and the government management level is different.For example,the flow of OFDI of China's manufacturing industry,leasing and business service industry,construction industry,mining industry,wholesale and retail industry have a significant positive correlation with the GDP of corresponding industries in China.While the flow of OFDI of construction industry,mining industry and financial industry have a significant negative correlation with the per capita national income of the host country.In general,the industrial structure of China's OFDI towards ASEAN has been continuously optimized,and its investment advantages in wholesale,retail and construction industries have been continuously strengthened.Although the scale of investment in manufacturing,leasing and business services is at the forefront,whose investment advantages are not obvious.Finally,with the in-depth development of the construction of "The Belt and Road Initiative",this paper agree with that the investment scale of some industries should be adjusted and enlarged,make the industry selection according to the characteristics of the state and industry,at the same time strengthen inter-operability with ASEAN and industrial park construction,and constantly optimize the industrial layout,so as to promote the domestic industrial structure optimization and upgrading in China.In general,there are some innovations in this paper as following: firstly,the entry point of this paper is innovative.At present,the study of OFDI of China mainly focuses on the choice of investment mode and investment location and the research on industrial choice is relatively blank.This paper takes the industry selection as the entry point,selects ASEAN as the research object,subdivides nine industries of China's national economy,and studies the industrial selection of China's direct investment in ASEAN from both macro and micro perspectives,which can be extended to the industrial research of OFDI in other developing countries.In addition,the research method is innovative.This paper selects the latest relevant data,applies the Index of Revealed Comparative Advantage(RCA),unit root test,co-integration test and fixed effect model in the measurement method to comprehensively study the industrial selection of China's OFDI to ASEAN.