Research On The Influencing Factors Of China’s Direct Investment In Middle East Countries

The Belt and Road Initiative provides a good platform for China to respond to the complex and ever-changing international environment and assume the responsibility of big countries.That is also an important platform for achieving mutual benefit and win-win development for all alongside countries.The Middle East region is an important node of the Belt and Road.It has an important energy strategic position for China.It has significant meaning to expand China’s direct investment to Middle East countries.Recently,the economic and trade cooperation between China and Middle East countries has continued to deepen,and Middle East countries has kept to optimize its investment environment,which has led to an increase in direct investment conducted by Chinese companies in the Middle East.However,China’s direct investment in Middle East countries is still small.The changes in the national risks and social rule of law in the Middle East have affected China’s direct investment in Middle East countries.This paper mainly analyzes the influencing factors of China’s direct investment in Middle East countries based on the investment gravity model.Firstly,it give a detailed analysis of China’s investment status in Middle East countries,the investment environment and exiting problems of China’s direct investment in Middle East countries.Secondly,the paper put forward the hypothesis of the influencing factors of China’s direct investment in Middle East countries from three diffensions which including investment protection environment,national risk,institutional environment and host country’s fuel resource endowment.It also set a hypothesis that bilateral investment agreements have moderating effects on national risk.Then we set an extended gravity model to estimate the impact of various factor of China’s direct investment in Middle East countries by employing direct investment panel data from 2003 to 2017.The study show that:1.China’s direct investment in Middle East countries is affected by factors such as the size of the host country market,the distance between China and the host country,the political risk of the host country,the economic freedom of the host country,the fuel resource endowment of the host country,and the bilateral investment agreement between China and the host country;2.Investment of Chinese enterprises in Middle Eastern countries shows obvious resource-seeking motives;3.China’s direct investment in Middle Eastern countries is more inclined to invest in countries with poor legal environment;4.Whether to sign bilateral investment agreements will affect national risk tolerance for Chinese enterprises when they face thus risk in host countries.Thirdly,the paper put forward some measurements based on the mentioned research conclusions.