Research On The Motivation Of China's Foreign Direct Investment

Along with deepening of the reform and opening-up,evolution of the division of labor patterns and execution of the strategy of "going out",China's integration into the global production network,including three dimensions such as foreign trade,FDI and OFDI,is growing to breadth and depth.Particularly notable is that China's OFDI has developed rapidly since the strategy of "going out" promoted to be the major strategic policy concerning of the development of the country.Although the motivation theory of international direct investment is getting better and better and motivations are concluded from different perspectives.But with the deepening of intra product specialization,decomposition and reconstruction of the global value chain and impaction of the global production network is profound,we need to look at the current stage of China's OFDI.With combing FDI motivation theories and the classic literatures of the global production network and the current situation and characteristics of China's OFDI,the paper firstly attempts to build a new theoretical analysis framework of China's OFDI.Then the paper tends to verify the motivations of China's OFDI by calculation of length and upstreamness of GVC,using the method of social network analysis and regression of the dynamic panel data model based on country and industry level data from host country and home country two perspectives.Finally,combined with the theoretical analysis,empirical test and case study conclusions,the paper puts forward some proposals to promote "going out" of China's enterprises,to improve China's status in the global value chain division and to strengthen network power in the global production network.According to the above research ideas,the paper consists of seven parts.The first chapter is the introduction.This part mainly expounds the research background and research significance,introduces the main ideas and structure of the research,summarizes the methods used,and points out that the innovation of this paper and the shortage of research.The second chapter is the literature review.In this part,we firstly systematically sorted out the domestic and foreign existing foreign direct investment theories and are familiar with the representative FDI theories of both the developed countries and the developing countries.Then the paper concludes the contribution and lack of the present theories and finds the best starting point and theoretical basis of the research.Finally,in order to make the further extention of the existing models,this paper combed out the existing mainstream methods and models used in the empirical analysis of OFDI.The third chapter is the development status and characteristics of China's OFDI.First of all,this paper analysis the pattern,the distribution and the main body of China's OFDI based on the two kinds of caliber statistics and then gives correct interpretation to the China's OFDI distribution and the characteristics on current stage.The fourth chapter is the new exploration of motivation of China's OFDI under the perspective of global production network.On the one hand,the paper makes a supplemental study under the background of globalization.Furthermore this paper attempts to construct "network power driven” analysis framework and give the definition of “network power” based on the perspective of dependent and analysis the necessity to further enhance the “network power” through OFDI.On the other hand,this paper tries to build the analysis framework of value chain extension and upgrade theory.And then tends to analysis the influence of change in the status of China's OFDI in the global value chain division,to explore the feasibility of Chinese enterprises to avoid being locked in the bottom of the value chain and move to top of the value chain.The fifth chapter is the empirical test of the motivation of China's OFDI.This part mainly includes: the empirical tests based on the " network power driven theory " at the national level,the empirical tests based on " value chain extension and upgrade theory” at industry level,the analysis the applicability of classic theories in China.The sixth chapter is the case analysis of Chinese enterprises' OFDI.In this part,the paper analysis the specific investment motivation of Haier group,Lenovo Group,HUAWEI investment and holding,SINOPEC group and the other enterprises.At the same time,the paper makes evaluation whether the reasons of enterprises' OFDI are consistent with the above analysis.The seventh chapter is the conclusion,enlightenment and prospect.This part mainly summarizes the main conclusions of the full text,and draws the corresponding realistic enlightenment and policy recommendations.Finally,the future research direction of motivation behind China's OFDI is prospected.Through the research above,this paper draws the following conclusions:First,conclusions can be drawn that China's OFDI grows rapidly,OFDI entities tend to diversify,OFDI flows to industry becoming more and more widely and OFDI geographical distribution regardless of the selection of the first or the final destination,the geographical distribution of foreign direct investment has the characteristics of agglomeration and dispersion.But in terms of the geographical distribution and direction of OFDI,the results of the two statistical methods are not in consistence.The first different point: according to the first overseas destination for statistics,China's OFDI mainly flows into Asia.But according to the final destination abroad,China's OFDI mainly flows into Europe and North America.The second different points: according to the first overseas destination,statistics show that the third industry has been favored in recent years.But according to the final destination for statistics,China's OFDI investment mainly flows to the second industry,which is quite different from the result above.Second,at the national level,China's OFDI has the following characteristics: characteristics of path dependence and self strengthening,that is,China is more inclined to invest to the countries that have been previously invested.The second characteristic: resource seeking and market consolidation and expansion.Chinese investment tendency is more obvious when the host country with abundant natural resources and Chinese exports to the host country is large.The third Feature: institution elusion and risk aversion.The former shows that China' OFDI,especially the resource seeking OFDI,is characterized by institution elusion.The latter shows that China's OFDI is not as foreign scholars have said,with a strong risk tolerance,willing to invest in high-risk areas.Third,in the industry level,the driving force of China's OFDI has become increasingly strong.Overall,the current stage of China's OFDI incentives can be attributed to the following points.The first reason: the strengthening of the network power of China's 35 industries.China's 35 industries have the power to enhance the network,boost the strength of Chinese enterprises to accelerate the pace of going out,and actively build their leading global production network,to further strengthen their “network power”,and to enhance the profitability.The second reason: the improvement of status in GVC,which showing that the status of China's most industry in the global value chain division is generally improved,not only limited to the final production and processing,but more as intermediate products for other countries to use,and gradually move to the top of the global value chain.This change drives the increase of China's OFDI,and tries to further upgrade the global value chain by OFDI.The third reason: It means China's full integration into the global production network and domestic production needs more intermediate inputs from abroad.In order to ensure the supply of raw materials from upstream and sales channels of the downstream,China's OFDI is bound to increase.The fourth reason: the increasing of industry capital intensity,which is conducive to China's enterprises to “go out”.With the increasing of the capital accumulation of various industries,the corresponding products reflect the characteristics of capital intensity.Industries are in a dominant position in the international competition with high capital intensity.These industries with advanced equipment,leading technology,high skilled workers lay the foundation for the Chinese enterprises to “go out”.