Research On The Industry And Location Choice Of China’s Outward Foreign Direct Investment

According to “World Investment Report2013”，the world’s foreigndirect investment flows reached$1.5trillion in2011, experienced arecovery after several years of decline, finally exceeded the pre-crisislevel. But in2012affected by the slowdown in global economic recoveryis weak and growth in emerging markets and other reasons, foreign directinvestment flows decline into$1.3trillion.After thirty years of reform and opening up, China has made remarkableachievements in the world to make the process of economic development.In2012, affected by the sovereign debt crisis in developed economies,MENA unrest and other factors, the slow pace of world economic recovery,Chinese enterprises “going out” the external environment facing isincreasingly complex. However, China’s economy has maintained sustainedand rapid growth momentum, this provides a good macro support for Chineseenterprises to expand overseas investment. In2012, China’s foreign directinvestment flows reached$84billion, second only to the U.S., Japan tobecome the world’s third largest source of foreign investment.Foreign direct investment is not driven by the absolute advantage inworldwide, but by the home country at a particular location for industrieswith comparative advantage and drive on the host country has the similarindustry.In this paper, the reason for the formation of foreign directinvestment comparative advantage of location and industries is classifiedas economies of scale and first mover advantage, resource endowmentsadvantage, technical advantages, gathering advantages, transportation cost advantage between regions and markets, government policy andcultural communication advantages. According to industrial advantagesand location advantages dependence, manifestations and complementarityprove the correlation between industrial advantages and locationaladvantages.And in accordance with China’s outward foreign investment data in1988-2012, describe the current status of China’s outward foreign directinvestment and problems:(1)foreign direct investment growth rate is high,but compared to the size of the gap between developed countries and regionsare still significantly;(2)distribution of diversified foreigninvestment industries, investment in traditional industries stilldominate;(3) foreign direct investment covering a wide area, but mainlyin the Asian region.Then by calculating revealed investment advantage index, staticaggregation index, dynamic aggregation index and the empirical analysisand granger causality test of industrial and locational data. Finally,based on theoretical and empirical analysis statement, try to proposedsuggestions and industrial location choice for China’s foreign directinvestment.