A Study On China’s Direct Investment To ASEAN

In the twenty-first century, the processes of economic globalization and regional economic integration have gradually accelerated and become a major trend of the development of the world economy today. The rapid development of international direct investment is not only an important manifestation of increasingly economic globalization, but also one of the main driving forces for the growing of the world economy. In this context, every country should seize the opportunity, develop foreign direct investment (FDI) actively and establish international production and management system in the world so as to promote the domestic industrial structure adjustment and economic development. With the increase of China’s economic strength and the implementation of the "going-out" strategy, China’s outward FDI has been developing rapidly during recent years. And China has become the world’s fifth-largest investor and the largest investor among developing countries. China’s outward FDI is facing an important period of strategic opportunity. At present, because the level of foreign investment in China is much higher than that of outward FDI by China, and China has a huge amount of foreign exchange reserves, China has to accelerate the development of outward FDI. Meanwhile, the development of Chinese enterprises are facing overcapacity, shortage of resources, frequently pressure from international trade protectionism, which objectively require Chinese enterprises to go out, to participate in international competition, to expand markets, to utilize resources and acquire technology through outward FDI, so as to promote the upgrade of domestic industrial structure and economic development.China is the largest developing country in the world, and ASEAN is the world’s largest economic union which is composed by developing countries. Although the world economy is slowing down due to the impact of the debt crisis, China and the ASEAN country’s economy is still showing a trend of steady and rapid growth and becomes a stabilizer and the engine of growth for the development of world economy. ASEAN’s investment environment has been gradually improved in recent years, and ASEAN has become the second largest region which foreign capital flows into after China in Asia. China and ASEAN countries are adjacent, and there are great important geopolitical relations between the two sides. In addition, China and ASEAN has continued to strengthen the cooperation in non-traditional security fields. What’s more, the establishment of the China-ASEAN Free Trade Area increasingly deepens the economic and trade cooperation between the two sides. In recent years, China’s direct investment towards ASEAN has developed rapidly, and China has become the fifth-largest investor in ASEAN.There is both theoretical and practical meaning in studying China’s direct investment towards ASEAN. The theoretical meaning lies in that this study not only tries to enrich the developing country’s outward FDI theory, but also provides reference for relevant scholars. The practical meaning lies in that this study will be helpful for Chinese government departments, non-government organizations (NGOs) and enterprises to make strategies, policies and reference when developing outward FDI towards ASEAN or countries similar to ASEAN. This dissertation refers to a large number of literature and statistics from domestic and foreign country, and uses normative approach, qualitative method, comparative approach as well as classified method to systemically explore China’s direct investment towards ASEAN.This dissertation includes four main aspects. Firstly, on the basis of introducing the history of China’s direct investment to ASEAN, it analyzes the current situation and characteristics of China’s direct investment to ASEAN and sums up the major problems facing with China’s direct investment to ASEAN. Secondly, it systemically analyses the political, legal, economic, social and cultural, natural environment for investment in ASEAN. Thirdly, it analyses the comparative advantage of China’s direct investment to ASEAN. Finally, it proposes strategies and policies to promote China’s direct investment to ASEAN from the perspective of enterprises, industry, country, government departments and NGOs, respectively.The innovation of this dissertation is mainly reflected in the following aspects: Firstly, through analyzing of relevant data, it uses a large number of figures and tables to illustrate the status quo, characteristics and problems of China’s direct investment to ASEAN. Secondly, it adopts comparative approach to analyze the comparative advantages of China’s direct investment to ASEAN. Especially when analyzing the comparative advantage on technical level, it makes a comprehensive analysis of the status and intensity of investment of R&D, the export of high-tech products, the application quantity of patents and trademarks as well as the innovation ability, with drawing the conclusion that China has comparative advantages when investing directly to ASEAN. Finally, when studying the country strategy, it uses classified approach to divide China’s direct investment to ASEAN into primary industry, resource-seeking, market-seeking, technology and management experience seeking outward FDI, and each type of investment has the corresponding country strategy.This dissertation also exists the following inadequacies:Firstly, there is some limitation on the data, such as data deficiency in some countries, data discrepancy between China and ASEAN due to the different statistical methods, poor data timeliness and so on. Secondly, it lacks of econometric research approach.