Outward Foreign Direct Investment And Capacity Transferring Under "One Belt And One Road" Strategy

At present,China's economy is gradually entering the "New Normal".While the economic development is slowing down,the economic structure is gradually shifting,From the labor-intensive manufacturing industry to the higher-tech research service industry,it is gradually moving from the low end of the global value chain to the High-end industry.However,China is currently facing a series of economic difficulties.The issue of overcapacity is an important issue that needs to be solved urgently.Some experts on the Internet have suggested that foreign direct investment under the "One Belt and One Road" policy can effectively alleviate China's overcapacity.At the same time,since the concept of "One Belt and One Road" was proposed,China's OFDI in countries along the "One Belt and One Road" has also increased year by year,and it has actively responded to the foreign strategy proposed by the Chinese government.The purpose of this paper is to analyze the impact of China's foreign direct investment on China's overcapacity under the "One Belt and One Road" strategy,the impact on China's social welfare,and how China can promote direct foreign investment in the "One Belt and One Road" context.We first analyze the impact of China's "One Belt and One Road" policy on China's capacity utilization rate from the theoretical part,uses the trade costs of the two places as the degree of market integration between China and other countries,and compares and analyses China's "One Belt and One Road." Before and after the policy,China's capacity utilization rate and social welfare,using the construction of game models and numerical analysis methods to compare China's implementation of the "One Belt and One Road" and the external direct investment strategy after the capacity utilization and social welfare.Theoretical analysis studies have found that following the implementation of the "Belt and Road" policy,after integrating China's markets with other countries,the issue of overcapacity in China will be alleviated to some extent,and the social welfare levels in China and other countries will be correspondingly improved.We then expand the theoretical model and analyzes China's capacity utilization rate and social welfare when China's enterprises conduct outward foreign direct investment(OFDI)under the "One Belt and One Road" strategy.The model compares and analyzes the profits of Chinese enterprises when they perform overseas industrial transfer and cross-border mergers and acquisitions,China's social welfare,and the social welfare of countries along the "Belt and Road".The study of the extended model has found that for Chinese companies,the profits that can be obtained from transferring overseas industries are the greatest.However,the direct foreign investment of enterprises can effectively alleviate the problem of overcapacity in China,but it will reduce China's social welfare.Therefore,the Chinese government needs to balance the overcapacity and social welfare,find out the best location choice for Chinese enterprises under the"One Belt and One Road" strategy,and promote the "going out" of Chinese enterprises.