Study On Determinants Of Investment From China To Malaysian Manufacturing Industry

In recent years,China's economy has grown rapidly,capital and technology have gradually accumulated,and the strength of enterprises has also increased.With the increasingly fierce competition in the domestic market,problems such as shortage of resources and environmental pollution have become more prominent.China's largescale enterprises have begun to go abroad and look for investment opportunities with cost or market advantages on a global scale.The number of foreign direct investment projects and total amounts are constantly expanding.As a neighboring country of China,Malaysia is located in the strategic location of ASEAN and has a good endowment advantage and location advantage.It is one of the important target countries for Chinese foreign direct investment.In this context,this paper attempts to study the status quo,problems and influencing factors of China's investment in manufacturing in Malaysia,which has important theoretical and practical significance.This article begins with a review of the current state of China's investment in manufacturing in Malaysia.On this basis,combined with the existing direct investment theory,the factors affecting China's investment in Malaysian manufacturing are analyzed.Finally,this paper uses panel data and logistic models of China's manufacturing investment in Malaysian states from 2007 to 2016 to empirically examine the impact of factor endowments and market size on China's investment in manufacturing in Malaysia.Based on the above research,this paper mainly draws the following conclusions.First,from the perspective of the host country,Malaysia has abundant natural resources,a liberal investment environment,a good ranking of the world business environment,and a superior geographical position – strategically located in ASEAN,which has huge market size and convenient import and export conditions.Second,from the perspective of the home country of China,sufficient foreign exchange reserves and the company's own strength,industrial transformation needs and industrial policies,as well as policy support policies for enterprises to “go global” have created for Chinese enterprises' foreign direct investment.The most important point is the level of trade between China and Malaysia.In the past decades,the bilateral trade volume between China and Malaysia has shown an increasing trend year by year,which has greatly promoted the direct investment of Chinese enterprises in the Malaysian manufacturing sector.Third,it is concluded from empirical research that resource endowment and market development will affect China's direct investment in Malaysia.