An Analysis Of Effect Of China’s OFDI In The Countries Along The Belt And Road On The Trade Structure Of The Home Country

Although the Sino-US trade frictions have temporarily come to an end,the impact of the big power disputes affecting the global economic situation on globalization will not stop.Under the background of the surge of trade protectionism and counter globalization,the "One Belt and One Road" initiative has demonstrated China’s great role in the process of economic globalization.The research on the effect of OFDI’s home trade structure on the "One Belt and One Road" country has profound significance for promoting China’s better investment cooperation with other countries along the belt and road,enhancing trade and further expanding China’s worldwide influence.Firstly,this paper establishes an analytical framework for the impact mechanism of OFDI’s trade structure effect by combing the relevant literature of OFDI’s trade structure effect.The transmission mechanism of OFDI on home country’s trade structure is divided into four parts:investment motivation,investment direction,intermediate effect and trade structure effect.Among them,heterogeneous investment motivation and the flow of investment with positive and negative gradients will determine the intermediate effect of investment and the final structural effect of import and export trade.This mechanism can be divided into the following realistic description and empirical analysis.Secondly,by analyzing the data of OFDI and trade structure of 61 countries along the "One Belt and One Road" for 2003-2017 years,this paper gives a systematic and comprehensive evaluation of the status quo of OFDI and trade structure between China and the countries along the belt.In terms of the industry structure of OFDI,China has changed from a major energy-based investment industry to a diversified investment pattern in manufacturing,leasing and business services,wholesale and retail industries,and the investment structure has been significantly optimized.In terms of the total trade volume of the "one belt and one way" country,in 2017,with the solid development of the "One Belt and One Way" construction,China’s trade volume with the countries and regions along the line increased significantly.In terms of trade structure,China’s exports to the "along the way" countries are mainly capital,technology and labor-intensive products.The structure of imported products is shifting from capital intensive products to resource intensive products.Thirdly,according to the panel data of 31 representative countries along the 2003-2017 years along the "belt and road"2 area,the trade gravity model is used to analyze the impact of China’s direct investment flows on the "one belt along the way",the host country’s per capita GDP and the host country’s technical endowment variables on the trade structure of the home country.It is found that China’s OFDI has significant resource-seeking and overseas market-seeking characteristics.For resource-intensive products,China’s enterprises’ OFDI has increased the import of resource-intensive products from the host country,which means that resource-intensive industries are gradually shifting from China to some countries along the line.For capital-intensive products,China’s OFDI inflow helps domestic capital-intensive industries and technology-intensive industries to seek overseas markets,which has significant characteristics of market development.From this point of view,China’s OFDI to the countries along the line is significantly improving the trade structure of China and the countries along the line which used to export resource-intensive products.At the same time,it is also imperceptibly helping domestic high-tech industries to obtain overseas markets,which is conducive to the optimization of China’s industrial structure.Finally,according to the conclusions of the study,this paper gives policy recommendations from two levels:the guiding role of the government and the service function.The guiding role:the government should encourage Chinese enterprises to make full use of the location advantages of the countries along the "one belt and one road" to develop resource seeking and market developing OFDI for the countries along the border,encourage enterprises to innovate investment patterns,and create national brand effects;encourage state-owned enterprises to participate in the merger and reorganization of foreign high-quality assets.Service function level:strengthen diplomatic contacts with countries along the line,establish political mutual trust,and create a good investment environment for investment enterprises;establish green examination and approval channels for foreign direct investment enterprises,relax capital flow control;establish information disclosure platform for enterprises’ foreign investment to prevent investment risks.