Research On The Risk Of China’s Direct Investment In Countries Along "the Belt And Road"

At the opening ceremony of the Boao Forum for Asia Annual Conference in 2021,General Secretary Xi Jinping pointed out that high-quality Belt and Road development is an important plan to respond to profound changes unseen in the world in a century and a great endeavor to build a community with a shared future for mankind.With the deepening of the Belt and Road Initiative,the scale of China’s direct investment in countries along the Belt and Road has increased significantly.At the same time,China’s OFDI activities in countries along the Belt and Road will face great investment risks due to the complex political environment,weak economic foundation and large social and cultural differences.Therefore,it is very important to effectively prevent the risk of China’s direct investment in countries along the Belt and Road,which is of great significance to accelerate the pace of enterprises going global.In this paper,41 countries along the belt and Road are selected as research samples,the theory of the development stage of international direct investment,the theory of comparative advantage and the risk theory of foreign direct investment are used as theoretical support,and the fixed effect model is used to conduct an empirical analysis on the risk of China’s direct investment in countries along the Belt and Road.The research findings are as follows :(1)The basic characteristics of China’s direct investment in countries along the Belt and Road are as follows: the investment scale shows an overall increasing trend;the investment region is mainly concentrated in ASEAN countries;the investment industry shows a trend of diversification;cross-border mergers and acquisitions have become the mainstream form for China to participate in investment in countries along the Belt and Road.(2)The risk of China’s direct investment in countries along the Belt and Road mainly includes political risk,economic risk and social and cultural risk,with obvious heterogeneity.In terms of regional distribution,the investment risks are mainly concentrated in ASEAN countries.In terms of industry distribution,the risk of energy and infrastructure construction industry is higher.From the perspective of the investment subject,state-owned enterprises face greater investment risk.(3)Among the risk factors of investment in countries along the Belt and Road,governance capacity of host country,economic risk index and cultural distance between the two countries have significant differences on China’s OFDI.Among them,from the full-sample regression results,the host country government governance capacity,economic risk index have a significant positive impact on China’s OFDI;the cultural distance between the two countries has a negative but not significant effect.Based on the different degree of development of countries along the Belt and Road,the whole sample is divided into developing countries and developed countries for regression analysis.For developing countries,the governance capacity of host government and economic risk index have a significant positive impact on China’s OFDI.The cultural distance between the two countries has a positive but insignificant effect.For developed countries,the cultural distance between the two countries has a significant negative impact on China’s OFDI.The governance capacity and economic risk index of host country have positive but not significant influence.Based on the above research,this article from "strengthening international cooperation between governments,perfecting OFDI legal system,constructing scientific economic risk early-warning system,strengthening talent reserve,promoting cultural exchanges between the two countries,and implementing localized management" aspects to take corresponding measures to effectively guard against risks of China’s OFDI in countries along the Belt and Road.