A Comparative Study On The Impact Of Economic Factors Of The Host Country On China’s OFDI

With the deepening of economic globalization, China’s Outward Foreign Direct Investment is racing ahead. The scale of China’s OFDI has expanded, and it continues to rise in both the stock and flow. In 2013, China’s OFDI flow had jumped to the 3rd place in the word. But the stock still keeps a certain distance from the developed countries. Although the OFDI investors in China has been diversified, most of them are still owned by the state. Although the fields and industries of China’s OFDI are constantly widened, it still concentrates in specific contries and industries.Nowadays, China’s economic growth rate has slowed, and she is in the face of transition pressure. The excess production capacity is needed to be solved urgently. So exploring international market takes a very important position for China’s sustainable development. The China’s OFDI can not only impel China’s sustainable development, but also provide an important way to take an active part in economic globalization. So, this paper focus on the China’s OFDI. In the view of neighboring countries’ strategic position and the growing importance of economic factors, especially the fiancé factors, we choose neighboring countries as the objection, studying the role of inflation, liquidity and financial development in the process of OFDI on these countries.China’s OFDI presents her distinctiveness on account of the political, economy, cultural backgrounds. Then we doubt whether the influence of the host’s economic factors is still diffirent on China’s OFDI and the other countries’ ? What makes these diffirences? To make this model can reflect the real situation more realistic, we add experience, market size, open, institutional quality into this model as the control variables. We set up two panel data model: one use foreign direct investment inflows of China’s neighboring countries as the dependent variable; the other one use China’s OFDI to these countries as the dependent variable. And then, according to the consequences, we use the method of comparative analysis to verify whether the economic factors has the same influence on China’s OFDI(special) and the other countries’(general).Through my study, we find that the economic factors have special effect on China’s OFDI to neighboring countries indeed. The effect of inflation is opposite: it is positive to the general law and negative to special law. But both the effects are not significant. The effect of liquidity is completely opposite. It set up significantly negative effect on the general law and not-significant positive effect on the special law. The fiancé is the same with liquidity. It set up not-significant positive effect on the general law and significant negative effect on the special law.Except studying whether the economic factors put special effect on China’s OFDI to neighboring countries and explain the reason, we also examine the effects of controlling variables. The conclusion is:the market size and institutional quality has the same effect on China’s OFDI and the other countries; the variable open has the absolutely opposite effects; the variable experience has the significant negative effect on the world, and the not-significant negative effect on China. At last, with the conclusion of the study, we propound five suggestions for enterprise using in practice.