Analysis Of Influential Factors Of China’s Agricultural Foreign Direct Investment

With the beginning of China’s FDI,agricultural FDI as an important part of its is growing with increasing speed.There are two reasons for this phenomenon.Firstly, agricultural FDI meets the requirements that China’s economy is opening to the out side world.Secondly, agricultural FDI is in line with the objective needs of the agri cultural enterprise development.Therefore,in recent years,relevant national polivies are favourable to agriculture.Chinese President Xi Jinping put forward two strategic co ncepts.There are the New Silk Road economic belt and the Maritime Silk Road of the 21st century. The two strategic concepts provide the vast international market for China’s foreign direct investment in agriculture.At the same time,because of short ti me of foreign direct investment,there are many shortages in investment experience,re gional selection,risk prevention and control and so on.It restricts agricultural enterpri ses to go out.So analyzing influencing factors of foreign direct investment in agricu lture is essential.This paper introduces the development of China’s foreign direct investment history of agriculture.The paper general elaborates changing process of investment and investment entity.From the way of investment,China’s foreign direct investment in agriculture experiences development path which from single foreign aids to the coexistence of a variety of investment.From the subject of investment, China’s foreign direct investment in agriculture experiences development path which from single state-owned enterprises to diversification bodies.Overall,China’s foreign direct investment in agriculture is going to matured gradually.Agricutural corporates not only obtain economic interests but also help host countries’agricultural development.Simultaneously,China’s foreign direct investment in agriculture resolves host countries’ problems of food shortages and creates a win-win situation.Next this paper summarizes the current status and features of China’s foreign direct investment in agriculture.There are the following features.Firstly,foreign direct investment in agriculture is growing annually,but Small and Medium Enterprises are as a focus.It means investment scale is too small.The ability to control markets is weak. Secondly,agricultural investments are concentrated in developing countries which are similar to our country’s level of economic development and less developed countries. Thirdly,investment areas are diversified increasingly not only in agricultural cultivation but also in agricultural researches.Fourth,investors are diversification.It includes state-owned enterprises,private enterprises,individual farmers and so on.And this paper applies empirical approach to analysis related factors which influence agriculture in China’s foreign direct investment.This paper selects ten arguments from economic aspect,political aspect,technological aspect and so on to do metering ruturn.Through econometric analysis,the conclusion is that factors which are positive correlation to China’s foreign direct investment in agriculture are GDP,GNI, agricultural exports,population density and agricultural intensification level,and factors which are negative correlation to China’s foreign direct investment in agriculture are exchange rate,political risk index and agriculture value added per worker.The regression result shows that host countries’GDP,GNI and agricultural exports are decisive factors which influence China’s agricultural FDI.This result illustrates on the one hand host countries" level of economic development is considered at first before agricultural enterprises go abroad.Agricultural enterprises prefer to go to the country which is more wealth to the economy.The first reason is that from agricultural sales market,the country which is more wealth to the economy has broader market which has more huge demand for agricultural products.The second reason is that from technological factors the country which is more wealth to the economy has a higher level of agricultural technology.So China’s foreign investment in the agricultural enterprises can learn more knowledge about agriculture without spending too much money.On the other hand, Chinese agricultural enterprises choose countries which China has invested.Besause we understand their needs preferences.At the same time,people in these countries know our produces very well.It can save a lot of money to develop host market for Chinese agricultural enterprises.At last,demographic factor is limited to attract foreign direct investment in agriculture because population do not change significantly over the years.Slow population growth can’t lead to attract foreign investment significantly.Other factors which include the level of agricultural intensification,agricultural value added per worker,political risk index and exchange rate influence China’s FDI in agriculture to some extent.According to the analyzing result of theoretical and empirical,this article puts forward strategic visions for China’s agricultural FDI from government’s angle and enterprise’s angle.The development pattern which is based on enterprises own efforts and backed to government’s policies is finalized.Specifically,companies improve the way of marketing after doing some market researches.The establishment of large-scale agricultural enterprise groups improves international competitiveness of Chinese agricultural enterprises.At the same time,government gives adequate protection and support to enterprises from aspects of economy,law,finance and so on.