Research On China's Direct Investment In Indonesia Under The Background Of "One Belt One Road"

In October 2013,Chinese President Xi Jinping and Indonesian President Susilo released the "Future Plan for China-Indonesia Comprehensive Strategic Partnership" in Jakarta,elevating bilateral relations to a comprehensive strategic partnership.After the bilateral relationship between China and Indonesia has been upgraded to a comprehensive strategic partnership,investment has become the biggest highlight of bilateral economic and trade cooperation.In China's "Belt and Road" initiative,Indonesia has become one of the countries with the most economic development potential along the "Maritime Silk Road" due to its unique geographical location,rich marine mineral resources,and huge market advantages.China's direct investment in Indonesia is divided into three phases,including the slow start period from 1990 to 2005,the steady development phase from 2006-2012,and the rapid development phase from 2013 to the present.At present,China's direct investment in Indonesia shows the characteristics of continuously expanding investment scale,structural changes,and increasingly diversified investment entities.There are various reasons to promote the continuous and positive development of China's direct investment in Indonesia.Indonesia's abundant natural resources,huge market potential,increasingly improved business environment,and the upgrading and outward transfer of China's own industrial structure have promoted Chinese investment in Indonesia.Based on the vector autoregressive model,this paper analyzes the influential factors of China's direct investment in Indonesia from an empirical perspective.The analysis shows that the expansion of the Indonesian domestic market size will lead to an overall increase in China's direct investment in Indonesia in the later period;the reduction in Indonesia's domestic political risk will lead to the growth of China's direct investment in Indonesia in subsequent periods;and infrastructure factors will affect China It has a positive effect on the flow of Indonesian direct investment,and it has a restraining effect on China's direct investment flow to Indonesia in the long term;the degree of openness has a restraining effect on China's direct investment flow to Indonesia in the short term,and it has a long-term effect on China's direct investment in Indonesia.Flow has a positive effect.While China's direct investment in Indonesia has maintained rapid growth,there are also many problems.Problems such as severe government corruption,inability of infrastructure development to keep up with the speed of economic development,intervention by large foreign countries,and the rise of economic nationalism tend to constrain the development of China's direct investment in Indonesia.The implementation of China's "Belt and Road" initiative provides a major opportunity to further promote China's direct investment in Indonesia.Chinese companies can continue to increase investment in Indonesian infrastructure,adopt localized business strategies,and try to cooperate with other countries in third-party market in Indonesia to promote Chinese high-quality,high-level direct investment in Indonesia.