Study On Location Choice Of China’s Direct Investment In ASEAN

CHINA-ASEAN Free Trade Area (CAFTA) since its implementation in2010, it has become the third free trade zone after NAFTA and EU. It is the largest free trade zone in Asia and also the largest free trade zone among developing countries. From the end of2002to2012, China-ASEAN mutual investment climbed from30.1billion US dollars to over100.7billion dollars. ASEAN has surpassed the U.S, Australia, and Russia to become the fourth largest destination for China’s foreign direct investment. Therefore, the research on location choice of China’s direct investment in ASEAN is significant in providing decis ion-making reference of China’s foreign direct investment and provides better instruction for China’s "going global" strategy.On the basis of theoretical study and previous research results, this paper obtains the qualitative and quantitative analysis of existing location advantage of ASEAN members and China’s current foreign direct investment in ASEAN. The paper also discusses the connection between location advantage of ASEAN members and China’s location choice of direct investment in ASEAN. Firstly, the paper selects related economic data of CHINA-ASEAN of the year2002-2011as sample data and use panel analysis to examine the relevance between the influencing factors of dec is ion-making and the actual decision. Secondly, this paper implemented the grey relation analysis on relevance between China’s direct investment and the factors of location advantage of each ASEAN members. Finally, on the basis of the analysis results, this paper proposed the optimization plan in location choice of China’s direct investment in ASEAN countries.