Research On Decisive Factors In Selecting Target Countries For China's Overseas Projects

In order to achieve long-term development of China's economy and society,and promote common development with all countries in the world,China has proposed a "going out" strategic layout.In 2013,President Xi Jinping proposed the strategic conception of "Silk Road Economic Belt" and "21st Century Maritime Silk Road".In 2015,the central government set up “one belt and one road” leading group to comprehensively promote the construction of the “One Belt and One Road” initiative,and provide support and guarantee for Chinese enterprises to go out on a large scale.In this context,how to choose a target country for Chinese companies undertaking overseas projects becomes the primary problem for those want to go abroad.This paper taking Z company with rich experience in overseas projects as an example,collects and sorts out the number and amount of overseas projects undertaken by the company for more than ten years,and finds the national macro indicators for the corresponding period according to the country where the project is located.Combining literature research and Z company's “going out” SWOT analysis and using the trade gravity model,the decisive factors for Z company in selecting countries to overtake overseas projects in the past ten years are analyzed from the four dimensions including the target country's market environment,industrial layout,electricity situation,and national quality.Besides,the decisive factors in decision-making are also analyzed for Z company after comprehensively promoting the “One Belt and One Road”.Furthermore,two decision-making factors between choosing “One Belt,One Road” and non-“One Belt and One Road” countries While Z Company undertakes overseas projects are compared in comparative analysis.Through analysis and comparison,it can be seen that in the past ten years,Z company has been more inclined to choose heavy industries,power supply shortage,high government intervention in the market,relatively corrupt government,and unstable countries.After “One Belt and One Road” initiative,Z Company turned to countries with relatively high economic freedom,democratic governments,safe and stable countries,and labor-rich countries.However,it led to a decline in Z's overseas market share.After the “One Belt,One Road” policy,Z Company has more choices to enter the “One Belt and One Road” countries.When entering the non-“One Belt and One Road” countries,more consideration is given to the country's national economic stability,economic development potential,economic freedom,and government honesty,national security,geographical location and so forth.Through the development history of Z company to undertake overseas projects,it is recommended that when China international engineering companies undertake international projects for the first time,they should focus on the best business areas that the company is best at,the target countries' promoting construction areas and use it as a breakthrough to gradually extends the other business segments of the company.Besides,China international engineering companies should focus on developing countries with imperfect infrastructure and pay more attention to the country's national economic stability,government management capacity and geographical location for countries that are not involved in the “One Belt,One Road” policy.