The Impact Of Chinese Economic Policy Uncertainty On Its Direct Investment In The “Belt And Road” Countries

With the development of economic globalization,the economic activities of the countries in the world are interwoven and integrated,trade exchanges are becoming more frequent,and the amount of foreign direct investment activities of the countries has increased significantly.With the implementation of the “Belt and Road” strategy,the scale of Chinese investment in the countries along the “Belt and Road” has been continuously expanded.Direct investment flows rose from $12.63 billion in 2013 to$24.15 billion in 2021.However,with the acceleration of global change,the current international political and economic situation is becoming more complicated.Although China’s economic policies can promote economic recovery in the face of various emergencies,but there is also a higher degree of uncertainty.“Belt and Road”as a new growth point for the Chinese and global economy,it is of practical significance to study the impact of economic policy uncertainty on its investment.This paper is based on panel data on Chinese direct investment in 55 the “Belt and Road” countries from 2005 to 2020 and the Chinese economic policy uncertainty index constructed by Steven J.Davis et al..In order to study the impact of economic policy uncertainty on Chinese investment in the “Belt and Road” countries,the fixed effects panel model and quantile regression model are used.It also analyzes the mechanism of the impact of economic policy uncertainty on Chinese investment in the “Belt and Road” countries by introducing institutional quality and institutional distance variables.The empirical results show: First,increased uncertainty about Chinese economic policy will encourage Chinese investment in the “Belt and Road”countries,that is,economic policy uncertainty has played a “push” role in the process of China’s outward investment.Second,with economic policy uncertainty,China is more inclined to invest in countries with a medium investment stock.Third,the quality and distance of institutions will play a positive role in the impact of economic policy uncertainty on Chinese investment in the “Belt and Road” countries.Fourth,economic policy uncertainty is heterogeneous to Chinese investment in the “Belt and Road” countries.Economic policy uncertainty will boost Chinese investment in sea route of silk road countries,but not in the land-based silk road countries.Both before and after the “Belt and Road” initiative,economic policy uncertainty boosted Chinese investment in “Belt and Road” countries,but more so before the initiative.Based on the above research,this paper proposes the following countermeasures:First,the relevant government departments should control the reasonable frequency of economic policy adjustment to balance the impact of China’s economic policy uncertainty on our multinational investment and domestic business environment.Second,the Chinese government should adjust its economic policies in accordance with the political and economic situation of the countries along the “Belt and Road”.At the same time,we should strengthen economic and trade ties with countries along the “Belt and Road” to provide more and better investment opportunities for our companies.Third,the government should encourage and guide Chinese companies to invest in “Belt and Road” countries in order to increase the frequency and success rate of their outward investment.Fourthly,multinational investment enterprises should strengthen their research and judgment ability on the international political and economic situation,and improve the objectivity and accuracy of decision-making.