A Study On The Impact Of Partnerships On China’s OFDI

Since the implementation of the reform and opening-up policy in 1978,China has been actively encouraging its enterprises to "go global." In 2015,China’s outward direct investment surpassed that of Chinese Hong Kong and Japan,ranking second in the world.In September and October 2013,during his state visits to Central Asia and Southeast Asia,President Xi Jinping historicly proposed the important issue of building the "Belt and Road" initiative,which has received high attention from the international community.Since the proposal of the Belt and Road initiative,Chinese foreign investors have focused on the countries along the Belt and Road as key areas of attention and have actively pursued outward direct investment.As of the end of2020,China’s direct investment stock in this region reached $200.79 billion,accounting for 7.8% of China’s outward direct investment stock,showing particularly remarkable performance.However,with the deep adjustment of the global economic structure and the pursuit of sustainable economic development,China’s economic development has entered a "new normal" mode.Starting in 2016,the growth rate of China’s outward direct investment has gradually slowed down.At the same time,the rise of anti-globalization trends,the emergence of trade protectionism,and the severe impact of major public health events have brought many challenges to China’s foreign investors.How to carry out outward direct investment safely and sustainably has become the primary issue that many Chinese foreign investors need to consider.Implementing partnership diplomacy may provide a new method for reducing the various risks faced by Chinese companies involved in foreign direct investment.China’s partnership diplomacy strategy has played an important role in the post-Cold War era,reflecting not only China’s willingness to share interests and risks with partner countries,but also its overall judgment on global economic,political,and military affairs.Since establishing its first partnership with Brazil in 1993,China has established 143 partnerships with over 100 countries(as of the end of 2020).Therefore,this article selects panel data from 57 countries along the "Belt and Road" from 2010 to 2020 as the research sample,and uses fixed effects and mediation models to study the relationship between partnerships and China’s foreign direct investment,and finds that partnerships have a positive promoting effect on China’s foreign direct investment.This article investigates the relationship between partnerships and China’s outward foreign direct investment through fixed effects and mediation models,and draws the following conclusions:(1)partnerships can promote China’s outward foreign direct investment in the host country;(2)partnerships can facilitate China’s outward foreign direct investment in the host country by promoting bilateral communication;(3)the better the quality of the host country’s institutions,the stronger the promoting effect of partnerships on outward foreign direct investment;(4)the better the quality of the host country’s institutions,the stronger the promoting effect of bilateral communication on outward foreign direct investment.Finally,based on the research,this article proposes the following suggestions:(1)further improve the construction of the partnership diplomatic relations system to create a new situation of mutual benefit and win-win;(2)accelerate the establishment of an information service system to improve information transparency;(3)strengthen the protection of the legitimate rights and interests of multinational enterprises;(4)actively carry out exchange activities to promote people-to-people and cultural exchanges.