Study On The Influencing Factors Of China’s Direct Investment In RCEP Countries

Outward foreign direct investment is the main form of capital flow between economies around the world.The development of Chinese OFDI has a pivotal role in enhancing China’s position in the global industrial and value chains.The international situation in the post-epidemic era is fraught with uncertainty,which has to a certain extent dampened the growth of Chinese OFDI and hindered the quality development of the Chinese economy.Against this backdrop,the Regional Comprehensive Economic Partnership Agreement(RCEP),which will enter into force in 2022,as the largest free trade agreement in the world at present,will not only help boost confidence in the economic recovery of RCEP member countries,but will also give a strong impetus to the development of outward FDI from RCEP member countries.In addition,RCEP countries are important destinations for China’s outward FDI,and studying the factors influencing China’s FDI in RCEP countries is conducive to the sound and stable development of China’s outward FDI.Based on a review of existing literature and relevant theories,this paper uses a fixedeffects model to investigate the factors influencing Chinese direct investment in RCEP countries based on three dimensions: economic environment,institutional environment and resource environment,and selects macro panel data of 13 RCEP countries from 2011 to 2020.The empirical results show that(1)in the economic environment category,the level of China’s digital financial development positively promotes Chinese direct investment,while the inflation rate of the host country negatively inhibits it.(2)Among the institutional environment factors,the Chinese government’s credit support will inhibit China’s FDI in RCEP countries.(3)In the resource environment category,the market size and human resource endowment of the host country positively attract China’s FDI to RCEP countries,while the strategic resource endowment of the host country has a negative effect.In addition,when the sample countries are classified into three categories,namely low and middle income,high and middle income and high income,it is found that only China’s digital financial development level has a positive incentive effect on all categories of countries,while the rest of the influencing factors have different performances in different income levels.The rest of the factors differ in their performance.From the above research findings,this paper puts forward the following policy recommendations: Firstly,at the enterprise level,for the different performance of various influencing factors in different types of countries,Chinese enterprises should reasonably arrange the regional layout of OFDI when investing,and at the same time optimise the current industry structure of OFDI,so as to make better use of the host country’s resource environment and promote China’s OFDI.Secondly,at the government level,China should strengthen digital financial incentives as a way to promote China’s direct investment in RCEP countries.It should also improve the legal and policy system related to this,and develop intermediary services for OFDI,so as to promote the better development of China’s FDI in RCEP countries.The main innovations of this paper are reflected in the following: first,the level of China’s digital finance development is considered in the selection of influencing factors.With the development of the digital economy in recent years,scholars have paid attention to the development of digital finance in China and its impact on Chinese OFDI,while the focus on RCEP countries is missing in these studies.The research in this paper helps to expand the research in this area and provides new empirical evidence in this sub-field.Second,in terms of empirical research,this paper classifies host countries according to their income levels and regional affiliations.The sample of RCEP countries selected for this paper includes countries with different levels of development,which have not been categorised in most previous studies,and this will affect the accuracy of the findings.This paper categorises the countries in the sample to address the issue of accuracy to a certain extent.