The Characteristics Of China’s Outward Investment And Its Economic Growth Effect

At the beginning of the 21st century, the Chinese government began to promote the "Going-out" strategy. Since then, China’s outward investment has grown rapidly and became the second largest ODI country of the whole world in 2015, which gives a profound impact on the world economy. Under the circumstances of the deep changes and a slow recovery of world economy as well as the structure transformation of domestic economy, China puts forward the construction of One Belt One Road (OBOR) and new ideas of fostering international cooperation on capacity, building multinational industry system to promote a new round of high-level opening up. In this context, there is a very important reality and necessity to analyze the characteristics of China’s outward investment and its economic growth effect. The research topic of this paper is China’s outward investment and its industry characteristics. We focus on the development of China’s OI, motivations and characteristics of different periods by combining the qualitative and quantitative studies based on economic statistics, and especially focus on its effect in promoting economic growth from the perspective of industry. We firstly use statistical methods to analyze the scale of ODI, the destination distribution and industry characteristics, and then test the correlation between the outward investment and economic growth with empirical analysis method. The research conclusion mainly includes the following aspects. Firstly, China’s OI expands rapidly but still in the initial stage of development when compared with other developed countries, and also lags behind the domestic economic and trade development. Secondly, the destination countries distribute all over the world while highly concentrated in Asia and other developing countries. Developed countries and countries in OBOR will be more welcomed in the future. Thirdly, The industry structure of ODI is not reasonable for the unreasonable distribution. The comparative advantage of industry hasn’t been well reflected such as manufacturing industry, as well as the lack, of strategic investment in some technologic industries. Finally, China’s outward investment is correlated positively with economic growth to prove that the economic growth effect has been revealed through some transmission mechanism in spite of the output elasticity remains small. With the improving of the quantity and quality, ODI will promote economic growth more effectively by promoting capital accumulation, optimizing the allocation of resources and industrial structure. At last, we look into the prospects of "Going-out" 2.0 and propose some suggestions for both government and enterprise based on the analysis above as well as the realistic background.