A Study Of Direct Investment Risk And Efficiency Along The Belt And Road Initiative

The Belt and Road Initiative was initiated by China for the first time,and the is a national-level top-level strategy led by the implementation of China,at the same time,it is an important layout for China's opening up after the“going out”strategy.The purpose of the the Belt and Road initiative is to transform China's own advantages of industry,technology,capital,experience and model into market advantages,and to cooperate with countries along the line to achieve win-win cooperation.The Belt and Road Initiative is different from the“Marshall”plan,it is proposed to establish a new global development partnership that is fairer,more just,and that meets the needs of all parties,and to share the dividends and achievements of China's reform and opening up.more importantly has laid a more solid foundation to the development of stable of the world economy in the long-term.The Belt and Road Initiative has been proposed for five years,China adheres to the principles of mutual cooperation,joint construction and sharing,and actively promotes investment cooperation with countries along the Belt and Road,It has achieved remarkable results such as the foreign direct investment stocks and investment flows are both growing,large-scale investment cases are gradually increasing,and the investment industry are diversified.The relevant reports indicate that Chinese enterprises realized investment in nearly 3,000 overseas enterprises along the Belt and Road countries,involving 18 major industries,with a total investment of US$20.18 billion,an increase of 31.5% over the previous year,accounting for China's foreign direct investment in 2017.The traffic volume was 12.5%,which was 3 percentage points higher than the previous year.In 2017,China's investment in the Belt and Road countries reached US$154.40 billion,accounting for 8.5%of China's foreign direct investment stock.There are 1,490 single-investment investments in foreign direct investment of more than $100 million,of which 13 or even more than $10billion.with the continuous advancement of the Belt and Road Initiative and various policy measures have been gradually implemented,the investment environment and investment fields are developing in a good direction.Chinese enterprises have ushered in important opportunities for large-scale external export of capital.For example,achieving investment facilitation,improving the efficiency of foreign investment;participate in the construction of overseas economic and trade zones,building a platform for overseas investment;accelerating international production capacity and equipment manufacturing cooperation,optimizing economic and industrial structure,and so on.However,there are many countries along the Belt and Road,these countries covering a wide range,and have great differences in geographical location,cultural traditions,religious beliefs,ethnic composition and economic development level,which lead toChinese enterprises faced with more serious investment risks in the region.In recent years,Chinese enterprises along the Belt and Road have suffered many losses because of the political,economic and social risks of the host country.For example,due to the changes of the domestic political situation in Myanmar have led to the suspension of the Dam Project of Myitsone and the Copper miner Project of Leipzig.The drift-Kunming railway project of China-Myanmar plan was canceled.The Sri Lankan government stopped the Colombo Port City project of Chinese investment on the grounds of opaque contract content.Russia's think China investment in Mongolia's several hydro power stations will destroy the ecology of Lake Baikal,proposing Mongolia to freeze Chinese investment projects after meeting with Mongolia.In this context,it is particularly important to thoroughly study the types of risks and their impacts of direct investment in areas along the Belt and Road.On the one hand,preventing investment risks can reduce the investment resistance of Chinese enterprises and increase investment efficiency and investment income.On the other hand,through successful foreign direct investment,we have achieved high-level regional cooperation,established friendly economic cooperation with countries along the route,promoted the in-depth implementation of the Belt and Road Initiative and achieved the strategic goal of cooperation and win-win.The paper analyzes the impact of various risks on the foreign direct investment process by using the heterogeneous stochastic frontier gravity model based on the panel data of direct investment in 34 countries along the Belt and Road in 2006-2016.The research shows social risks,political risks and economic risks all will bring different levels of investment resistance to China's foreign investment activities.Through calculation and has series of conclusions such as the loss of investment efficiency and the unreasonable distribution of investment locations.Put forward relevant policies and suggestions,such as strengthening political relations and preventing political risks;establish a risk assessment and early warning system,actively use the international dispute mechanism to solve problems.Enterprises consciously establish social awareness,strictly abide by the relevant legal systems of the host country,attach importance to the assessment of business environment along the line,and improve the scientific nature of investment decisions.