A Research On China’s Outward Foreign Direct Investment Development And Comparative Advantage Upgrading

With the continuous development of economic globalization, the international market competition continues to intensify facing China. In order to meet this challenge, China must enhance its comparative advantages, and actively promote market-oriented reforms, and continue to nurture entrepreneurs to avoiding participation in the international division of labor is locked in the most low-end of "smile curve" and fall into the "comparative advantage trap" problem. But whether it is Ricardo’s "comparative cost theory" or H-O’s "resource endowment theory", all because of the characteristics of a static nature weakens the significance of the actual policy guidance. There is a prerequisite "Dynamic theory of comparative advantage" in the promotion of comparative advantage is the accuracy of the maturity of the market mechanism and price signals, but for China, due to the current market mechanism is not perfect, market players less mature, and therefore there are obvious obstacles. Therefore, there is a problem to promote China’s comparative advantages in the theory. I think the key to solve this problem in the process of upgrading endowment structure is addressing information barriers, and the nature of entrepreneurship is efficient exploration, discovery, trial, error improvement and propagation of the market information. Therefore, an important source of power to promote a country’s comparative advantage is entrepreneurial resource development and entrepreneurship play. International market is an effective platform to enhance entrepreneurship through "OFDI", entrepreneurs in the allocation of production factors to effectively expand the scope of time and space, This can be for the formation of "human capital" self-investment and to "Know how" knowledge-based structure, the accumulation of a broader international platform, so foreign direct investment can have sustained level of transnational business incentives to the entrepreneurs with international experience. OFDI of entrepreneurs can improve their own quality, skills, knowledge and management of reserve levels, thus improve China’s comparative advantage continuously.This paper first discusses that the "Entrepreneurs element" has a very important role in the enhancement of China’s comparative advantages in theoretical level:China currently exports mainly labor-intensive product mix, with a relative lack of high-tech and high value-added goods, If things continue this way, our country will be locked in the most low-end of "smile curve" when participate in international division of labor. To avoid such a situation, entrepreneurs are needed to play a role. Entrepreneurs by improving their ability to continuously improve the ability for the efficient allocation of factors of production and market information integration, so as to achieve the upgrading of industrial structure and the enhancement of comparative advantage. The international market is an excellent platform to enhance Entrepreneurship. By OFDI, entrepreneurs can obtain more benefits, these benefits have three characteristics:"bidirectional","interoperability" and "symbiotic interests"."Bidirectional" means that, enterprises with OFDI have advantages such as labor costs in the face of foreign competitors and advantages such as technology and channels in the face of domestic competitors."Interoperability" means that entrepreneurs can bring "outside edge" and "internal edge" for joint complementary through OFDI, so the competitive advantage is more significant. The reason why entrepreneurs conduct OFDI, is a "symbiotic interest" reasons:first, the entrepreneur can better tap the potential of their own and their enterprises to get better play through OFDI, this is because there are broader space and platform in international market than the domestic market. The entrepreneur with the international market "training" will be more motivated to participate in foreign investment. So there is a formed positive interaction with the international market entrepreneurs. Second, the investing country of entrepreneurs and the host country where the process of making foreign direct investment will generate" incentive compatibility", the two countries will be bind in the "community of interests" through OFDI. The "symbiosis interests" will encourage enterprises to more foreign direct investment.This article also analyze by Spearman rank correlation to made further empirical research. Through the study we found a high degree of positive correlation in the development of China’s foreign direct investment, the enhancement of entrepreneurs’ ability and the expansion of the market. On this basis, we analyze the classic case of OFDI from the perspective of "bidirectional","interoperability" and "symbiotic interests" to reveal some law of successful OFDI and provide some investing strategy to the entrepreneurs. Finally, this article provides a number of specific actionable policy recommendations to promote the development of China’s OFDI on the basis of the previous analysis.