China-Europe Express Opening And FDI Inflow

chinese economy has shifted from high-speed growth to stable growth in the process of more than 40 years of reform and opening up.chinese degree of opening up to the outside world has also been expanding continuously.The quantity and quality of FDI actual utilization have been improved.In 2020,it achieved a foreign direct investment amount of144.37 billion US dollars,becoming the second largest country attracting foreign investment in the world,only behind the United States.At the same time,foreign investment has gradually shifted to high-end industries.However,due to limited resources,intensified international competition,and many risks and challenges faced by attracting foreign investment,such as continuous policies adopted by countries around the world to attract foreign investment,rising labor costs in China leading to foreign capital outflow,and uneven distribution of foreign capital in eastern,central and western regions.Therefore,it is urgent to explore new channels for FDI inflows,cultivate new advantages for chinese participation in international cooperation and competition,and solve problems encountered in attracting foreign investment.The China-Europe Railway Express is an inseparable part of facility connectivity and FDI inflow.It provides a new transportation route for economic and trade exchanges between China and Europe,builds a new window for chinese high-standard opening up,and helps cultivate new advantages for chinese cooperation and competition on the world stage.In view of this,the research focus of this thesis is on the relationship between the opening of China-Europe Railway Express and FDI inflow.The main steps are as follows: first,this thesis analyzes the development history and current situation of China-Europe Railway Express and FDI inflow respectively,and makes a preliminary judgment on their relationship through spatial-temporal differentiation analysis,FDI inflow trend graph,and gravity center movement trajectory graph;secondly,based on previous theoretical studies on influencing factors of FDI inflow,this thesis uses city panel data from 2003—2020 years,and virtual variables for opening China-Europe Railway Express.Using multiple-period DID method,it evaluates the empirical effect of opening China-Europe Railway Express on FDI inflow.And it verifies the stability of the results by using PSM-DID,placebo test,and excluding first-tier cities.Thirdly,this thesis deeply analyzes the mechanism of how China-Europe Railway Express affects FDI inflow.It uses sobel model to analyze whether China-Europe Railway Express can promote FDI inflow through foreign trade.Fourthly,this thesis conducts heterogeneity analysis on how China-Europe Railway Express affects FDI inflow.It divides cities into eastern,central and western regions,and central cities and peripheral cities respectively to analyze their heterogeneity.Fifthly,it analyzes whether there is spatial spillover effect of opening China-Europe Railway Express on FDI inflow.Firstly,it uses global and local Moran to explore whether FDI has spatial correlation.Secondly,it uses LM test to identify the suitable spatial econometric model for this thesis.Finally,it uses spatial error model to conduct spatial analysis on the research object.The research findings are as follows: first,the current situation analysis and spatial-temporal differentiation results show that chinese FDI achieved a relatively fast level of development in 2011—2020.After the opening of China-Europe Railway Express,Europe’s FDu I inflow increased significantly,and regions with higher FDI levels tended to open China-Europe Railway Express.Second,the benchmark regression analysis shows that the opening of China-Erope Railway Express can significantly stimulate FDI inflow.Compared with cities that did not open China-Europe Railway Express,cities that opened it increased FDI by 45.1%,and the benchmark regression result was still robust after PSM-DID,placebo test,and excluding first-tier cities.Third,the mechanism test shows that the opening of China-Europe Railway Express promotes foreign trade and thus brings about an increase in FDI inflow.Fourth,heterogeneity analysis shows that opening China-Europe Railway Express can significantly promote FDI inflow in regions with relatively backward economic development level in central and western regions,while it is not significant in eastern regions,which helps to alleviate the problem of uneven distribution of FDI in China;opening China-Europe Railway Express can bring about FDI growth for both central cities and peripheral cities,and central cities have more obvious effects.Fifth,spatial econometric results show that FDI has obvious spatial correlation,spatial positive spillover effect is obvious,which means that the opening of China-Europe Railway Express can not only promote the increase of FDI in the local area,but also promote the increase of FDI in the surrounding areas.Compared with cities that did not open China-Europe Railway Express,cities that opened it increased FDI by 44.3%,and surrounding areas increased by 25%.Based on the above analysis and conclusions,this article proposes corresponding countermeasures and suggestions.First: implement both quantity and quality,and accelerate the scale development of China-Europe Railway Express1.Second: introduce enterprises and other social forces,and give full play to the market mechanism.Third: strengthen the hardware and software infrastructure construction of China-Europe Railway Express,and improve its comprehensive service capabilities.Fourth: optimize the business environment of cities where China-Europe Railway Express operates,and facilitate enterprises to carry out trade.