A Study Of Location Advantages For Inward FDI Between China And ASEAN5

The economic development of a nation is closely correlative to its inward FDI, and that a nation's location advantage is an essential element to the inward FDI. Therefore, a conclusion can be reached that a nation's economic development depends on its location advantage to some extent. Concerning China and ASEAN5 (Singapore, Thailand, Malaysia, Indonesia and Philippine), which are developing countries with different levels of economic development, we can find their respective beneficial factors by comparing their location advantages. Furthermore, their respective disadvantages can also be found which require them to learn from others'strong points to offset their own weakness. Therefore, the comparison of location advantages for inward FDI between China and ASEAN5 is favorable to the bilateral economic development.By combining the theoretical analysis with empirical analysis, this paper systematically analyzes the changes of Inward FDI Performance Index and Inward FDI Potential Index since 1990s. It's necessary and imperative to strengthen location advantages for both China and ASEAN5 and this paper analyzes from which aspects to strengthen their own location advantages. Finally, this paper focuses on how to strengthen location advantages for both China and ASEAN5. From the view of Inward FDI Performance Index and Inward FDI Potential Index, this paper analyzes the changing tendency of inward FDI performance before and after finance crisis and potential in the future for both China and ASEAN5. The main innovation of this paper lies in concluding that China and ASEAN5 need to strengthen their respective location advantages. In addition, another innovation is to induct the system of appraising the investment environment for analyzing location advantages.