Laos To Attract China Direct Investment In Environmental Analysis

Since Lao government launched the New Economic Mechanism whichtransformed from the command economy to a market economy and also joined theASEAN, AFTA and is going to be a WTO member, Laos is apparently becoming moreand more attractive to both the domestic and foreign investors. Good performance inthe investment areas in recent years has led to rapid increase in foreign investmentsespecially from neighboring countries such as China, Thailand and Vietnam.The core of this research is to focus on the key factors that attract the Chineseinvestors to invest in Laos. The research is mainly conducted by distributingquestionnaires to Chinese companies and the total sample used in analysis is134which include Agriculture29, Industry26, Mining40, Hotel&Restaurant12,Consultant3, Construction5, and Investment&Trading19. The questionnaire isdivided into four parts: general information, investment environment, the key factorsthat motivate Chinese investors and open-ended questions. The statistical analysistool used is the SPSS and the arithmetic mean (average), percentage and standarddeviation are analyzed. The questionnaire design and analysis are based on therelevant theories of National advantage, global strategies, five competitive forcesmodel and SWOT analysis.In conclusion, the outcome of this research showed that the factors which attractChinese investors most are raw materials, competitive environment, political andsocial factors and neighboring locations and market the open-added questionsdemonstrated that size is a less attractive factor. In addition the political and socialmarket opportunities are the factors can be both opportunities end stability and newthreats. The big obstacles the investors face are the shortage of skilled labors andbarriers from government regulation. Meanwhile, it illustrated that the transportationinfrastructure needs to be improved and red tapes should be eliminated. In the future,good relationship between Laos and China will be more attractive and may providemore opportunities for Chinese investors to invest in Laos.