Research On Country Risk For Direct Mining Investment In Countries Along The ’Belt And Road’ Initiative

As the advancement of China’s "Going Global" strategy continues,the "Belt and Road" initiative brings new opportunities and growth to China’s Outward Foreign Direct Investment(OFDI)in mining.However,with the escalating amount of China’s OFDI in mining to the countries along the "Belt and Road",the complexity of risks associated with the political,economic,and social environment of host countries has become increasingly prominent.Still,there is a lack of systematic research on how to evaluate the host country risks comprehensively,formulate risk response strategies,and elucidate the influence mechanism of host country risk on OFDI in mining,which leads to a lack of basis for investment decisions.This paper studies host country risk to promote the high-quality development of the "Going Global" strategy and enhance mining cooperation with countries along the "Belt and Road",providing new theoretical evidence.This study follows a research approach of " onstruction of risk assessment indicator system-comprehensive national risk assessment-empirical study of impact mechanism".This study gradually and deeply delves into the subject matter by exploring theories,establishing models,and conducting empirical analysis.The research content of this paper includes the following three parts:(1)Initially,based on literature review and theoretical research,identify the host country risk of China’s OFDI in mining and establish a risk evaluation indicaator system.The risk assessment system is different from the existing national risk or sovereign risk studies,and contains more comprehensive factors affecting the mining OFDI at the national level.(2)Risk evaluation indicator system based on construction.Next,this study constructs an evaluation model for the host country risk of China’s OFDI in mining and uses a neural network model to predict country risk.The proposed model improves the scientificity and pertinence of the model to the real investment situation from the aspects of the evaluation indicator system and the way of determining the indicator weight.The research results show that,the constructed 6-dimensional evaluation index system can effectively evaluate the comprehensive OFDI in mining to the countries along the "Belt and Road".(3)This stuy analyzes the key influencing factors of the country risk in the host country,and through linear and nonlinear regression analysis of each influencing factor,reveals its influencing mechanism on the mining direct investment in the countries along the "Belt and Road",and proposes corresponding risk response strategies.Empirical results show that,among the factors influencing host country risk,resource potential and China’s elements are the most significant indicators,and the impact of country risk on OFDI in mining to the countries along the "Belt and Road" has a threshold effect based on resource endowment.The research results show that,countries with lower and medium risk constitute a significant proportion of OFDI in mining to the countries along the "Belt and Road",and the overall host country risk is not high.Specifically,Saudi Arabia,the United Arab Emirates,Pakistan,and other14 countries are ideal choices for China’s OFDI in mining.This study,based on theories of foreign direct investment and country risk and grounded in quantitative analysis,provides new perspectives and develops ideas for studying China’s OFDI in mining in the context of the "Belt and Road" initiative.