The Infrastructure Of The Host Country And China's OFDI Under The Background Of "One Belt One Road"

In 2013,China successively proposed the strategic concept of building a "New Silk Road Economic Belt" and "21st Century Maritime Silk Road".The aim of China's initiative is to improve the communication,establish a "cooperative community" and create a "common fate community" for the development and prosperity with the countries along the Belt and Road.In December 2015,the Asian Infrastructure Investment Bank(AIIB)was officially established.The priority of AIIB is to support infrastructure construction of the member countries.The current world economic landscape is in a transitional phase and China is at a critical stage of its own development.The proposal of "One Belt and One Road"strategic concept and the establishment of the AIIB have brought new economic globalization and regional economic integration opportunities for China the countries along the routes.It can also promote the win-win benefit of direct investment,economic and trade exchanges,energy supplementation,infrastructure construction and financial services between China and the regions along the route.Based on the "One Belt and One Road" strategy,this paper selects the dynamic panel data of 33 representative countries along the 14 years(2003-2016),builds an econometric model to analyze the relations between infrastructure construction of countries along the routes and China's foreign direct investment.Firstly,this paper analyzes the present state of China's OFDI and current infrastructure construction of the countries along the routes,preliminary explores the correlation between them.Then,by using the principal component analysis method,it integrates the power,transpiration,communication facilities,and urban infrastructure construction indexes to the construct a comprehensive index for infrastructure evaluation to comprehensively measure the currently infrastructure level of countries along the routes.As for the empirical analysis,this paper uses systematic GMM estimation method,selects the data from the year of 2003-2016 of 33 countries and regions along the "One Belt and One Road",using their infrastructure data as the core explanatory variables,OFDI stock quantity data as the explained variable,to establishes a regression model.This model also includes four control variables and one dummy variable,which is the market size,financial development level,degree of economic openness,and resource richness.Finally,based on the empirical results,theoretical analysis and the practical foundation the "One Belt and One Road" approach,this paper proposes several policy recommendations to improve the realization of China's "One Belt and One Road" strategy.The research results of this paper are as follows:Either the flow or stock quantity of China's OFDI are rapidly growing year by year.The mainly industries of the investment in the countries along the routes are mainly concentrated on leasing and business services,wholesale,retail,and finance.The improvement of infrastructure in the countries along the routes plays a significant role in increasing China's OFDI,especially in the energy and transportation and other economic infrastructure sectors.Under the background of the "One Belt,One Road" and AIIB,in order to improve China's OFDI,Chinese enterprises should firstly enhance their own level of internationalization and then be good at using the infrastructure advantages of the host country.The Chinese government should take the advantage of the "Asian Infrastructure Investment Bank" as an opportunity to effectively develop the infrastructure interconnection of the countries along the routes.