Superior Capacity And Foreign Direct Investment

Since the formulation of ?Outline of National Industrial Policy in the 1990s?in 1994,industry has been the main body of the national economy,the foundation of national development,the instrument of national rejuvenation and the foundation of national power.Against the background of actively guiding foreign investment in infrastructure,basic industries and high and new technologies in various regions of China,the volume of foreign commodity trade has shown a blowout growth.From 2002 to 2006,the growth rate of China's industrial fixed asset investment exceeded 20% for six consecutive years,while the volume of China's export of goods reached 28%.On this basis,China not only went to the front of the world in foreign exchange reserves,but also laid the foundation for China to become the world's "industrial power".However,with the outbreak of the world economic crisis in 2008,affected by the contraction of export trade,the rejection of the international market and the significant decline in the effectiveness of the original economic policies to actively encourage exports,the defects of China's export-oriented industrial development model began to emerge.Based on this,in July 2012,the National Development and Reform Commission and other 13 ministries issued ?the opinion of encouraging and guiding the implementation of the overseas investment of private enterprise?that clearly put forward The development of enterprises should meet the needs of China's economic transformation,acquire international high-quality resources through overseas investment,rebuild the brand image and cultivate the competitive edge of enterprises by expanding the sales network.As a result,the "Go Global Strategy" based on commodity trade began to take shape to the " Go Global Strategy " based on capital.At the same time,different from the strategy of outbound investment of traditional developed countries,China not only saw the green economy as an inexhaustible driving force to build a beautiful China,but also regarded it as an important force to create a new pattern of global green development.Therefore,since the 2008 meeting of global environment ministers put forward the "Global Green New Deal " and " Green Economy Initiative ",calling for the global transformation from "Pollution Economy" to "Green Economy",China have successively signed ?Guidelines for Establishing the Green Financial System?,?China-ASEAN Environmental Cooperation Strategy(2016-2020)?and?China-Africa Infrastructure Cooperation Plan?with European,Asian and African countries to achieve coordinated development of regional economy and ensure the green of Chinese foreign-orientation investment.This paper studies the interaction between the advantageous capacity and OFDI under the green development from the industry and enterprise level respectively.The specific theoretical mechanism includes the following two parts: referring to the study of Song Haiyun(2015)real economic cycle model(RBC),the paper establish a mathematical model to study the theoretical mechanism of the home country's industrial advantage capacity and OFDI under the green development;On the basis of considering the cost effect of green development,the production model was combined with the financial contract theory model of Ju and Wei(2011)to analyze the theoretical mechanism relationship between green development,advantageous capacity and OFDI under the model equilibrium.On this basis,the following questions are put forward in turn :(1)is the OFDI of China's industrial sectors to transfer the advantageous capacity through OFDI,or to transfer the excess capacity?(2)at different stages of development of advantageous production capacity,what are the influences of China's industrial industry's advantageous production capacity changes and external impact mechanisms on OFDI?(3)what are the impacts of OFDI and green development on China's industrial sectors?(5)how does the green development of the host country affect the development of the advantageous capacity and OFDI of Chinese industrial enterprises?Analysis on the characteristics of Chinese industries and enterprises' competitive capacity,foreign direct investment and green development.Based on literature review and conclusions of Paul streeten(1977),Bernard and Jensen(1999),Melitz(2003)and Helpman et al.(2004),this paper adopts the coupling measure method(Tan Chenglin et al.,2013)and the direct measure of profitability(Beneish et al.,2002)to analyze the data characteristics of the advantageous capacity of Chinese industrial industries and enterprises.The data distribution characteristics of China's OFDI from 2004 to 2016 as well as the data distribution status of green development in home and host countries were further analyzed.The main findings are as follows :(1)Based on the static and dynamic analysis the differences of the industrial advantages in production capacity,it is found that China industrial advantages in production capacity is mainly embodied in the manufacturing of chemical raw materials and chemical products,pharmaceutical manufacturing and communication equipment,which are mainly technology-intensive.However,food manufacturing,wine,beverage and refined tea manufacturing,textile and clothing manufacturing,shoes and hats manufacturing,paper and paper products manufacturing and other industries with relatively low coupling index are developing slowly.(2)as the optimization of economic structure in China,the increasing ability of the enterprise,expanding the international market,and increasing the openness,Chinese industrial enterprises already have the foundation to transform from "bringing in" to "going global".(3)According to the data of OFDI,OFDI by Chinese industrial sectors or enterprises is still in its early stage,accounting for a relatively low proportion of global transnational investment.It is mainly distributed in neighboring countries and gradually promoted outward.(4)In the early stage of environmental treatment,which mainly focused on China's industrial waste gas,the ecological environment in China's provinces was gradually improved,and the number of green development areas increased.However,due to the influence of the traditional economic structure,the green development of some regions isnot obvious,and the contradiction between regional economy and green development still exists.(5)Under the development mode with human resource development as the core of economy,the contribution of green development to the economy of the host country is significantly different.Under the background of green development in the home country,this paper makes an empirical study on the mutual effects of China's industrial advantages in production capacity and foreign direct investment.According to the data obtained from ?Chinese Yearbook of Industrial Statistics?,?China Statistical Yearbook?and ?Statistical Bulletin of China's Outward Foreign Direct Investment?from 2004 to 2017,the empirical research finds that(1)China's industrial advantages in production capacity,human resources scale and scientific and technological innovation have a significant impact on OFDI,but OFDI has a different impact on China's industrial advantages in production capacity,human resources scale and scientific and technological innovation.(2)the PVAR-GMM regression analysis was conducted in different stages,and it was found that the main factors in different development stages of advantageous production capacity had significant differences in their mutual effects.Considering the impact of environmental regulations on the preference for OFDI,China's OFDI is concentrated in industries with advantageous production capacity,while other industries have the tendency of OFDI due to the impact of environmental regulations,but lack the motivation for OFDI.Compared with the OFDI in the development stage of advantageous capacity industries,the OFDI in transitional and inferior capacity industries mainly aims at the reverse inflow of scientific and technological innovation and the expansion of international market.(3)the environmental regulation effect not only effectively inhibits the spillover of pollution investment,but also plays a good guiding role in the green development of industrial industry's advantageous capacity,thus laying a foundation for the long-term sustainable development of China's industrial industry.Based on the green development of the host country,the research on the advantageous production capacity and FDI of Chinese industrial enterprises is conducive to further clarifying the internationalization development direction of the advantageous production capacity of Chinese industrial enterprises,the choice of Chinese FDI regions,and the influence of the green development of the host country on the development of Chinese industrial enterprises.Research found that:(1)from the perspective of the difference of advantage capacity changes,the sustainable economic development led to the decrease of the profit growth of domestic enterprises tend to endowment driven national investment,profits and growth companies tend to efficiency driven and technology driven countries seek the expansion of the commodity market and the establishment of global competitive advantage.(2)from the perspective of market factor utility,changes in the market environment of the host country have a significantly higher impact on China's OFDI than changes in the advantageous capacity of Chinese industrial enterprises.Therefore,the expansion of commodity market is still the current OFDI mode of Chinese industrial enterprises.However,it is worth noting that the development of host financial market has a significant conversion effect on OFDI of Chinese industrial enterprises.(3)although China does have a tendency to transfer polluting production capacity to factor endowment countries through OFDI,direct investment in efficiency-driven and technology-driven countries is consistent with green development,and green OFDI has a significant promoting effect on the advantageous production capacity of Chinese industrial enterprises.Based on the above conclusions,in order to effectively promote China's OFDI under the framework of sustainable economic development,this paper puts forward the following policies and Suggestions.We will promote the extension of manufacturing links from high pollution and low added value to low pollution and high added value,and give full play to the role of market resource allocation in promoting the optimization of economic restructuring.We will change the way industries expand and develop.(2)while China transfers its superior capacity through OFDI,it should continue to improve environmental regulations to control pollution of industries or enterprises.Enterprises and investments with backward original production capacity,heavy pollution and heavy consumption of resources shall be restricted,restricted and withdrawn by corresponding administrative means under the legal framework.(3)forming a long-term mechanism for environmental competition and coordinating regional environmental development.Although the OFDI of Chinese industrial enterprises is basically consistent with the green development demand of the host country in the short term,there are still many questions whether the OFDI can be consistent in the long term.Therefore,this paper suggests that the green development factor should be gradually introduced into the market competition mechanism to realize the virtuous circle development of the ecological environment through the market competition mechanism.(4)promote the development of financial markets and financial industry,give full play to the role of market in financial resource allocation,built a sound monetary policy and macro-prudential policy double pillar regulatory framework,using lever regulating mechanism,keep the currency stable promote financial development,reduce the financial leverage to realize off virtual to real,for the structural reform and the improvement of economic quality create a neutral moderate monetary and financial environment.(5)in the process of promoting the OFDI Strategy,science and technology should further play their role in promoting the optimization of capital accumulation structure in the region.Furthermore,a long-term correlation mechanism between the level of science and technology and the agglomeration of regional manufacturing structure is established to give full play to the role of scientific and technological progress in the optimization of regional manufacturing structure.We should promote the spatial complementarity,effective matching and interconnected development of mid-and low-end manufacturing and science and technology industries,so that they can fully play their regulating and safeguarding roles in transforming the economic structure and realizing sustainable economic development.It is worth noting that in competitive market conditions,the growth of science and technology level appears to be regional concentration,which further widens the gap of regional green economy development.Therefore,in view of the overall situation,the government should actively coordinate the scientific research capabilities of various regions,reasonably allocate scientific and technological researchers,improve the science and technology trading market,expand the radiation area of scientific and technological achievements,and eventually form a differentiated coordinated development of science and technology.