Research On The Impact Of China’s Foreign Trade Policy Uncertainty On Foreign Ownership Of Manufacturing Export Enterprises

In recent years,due to trade frictions and interest disputes among various countries,the relationship between developed and developing countries has become increasingly tense,and the global trade environment has become increasingly volatile.Nowadays,while pursuing their own economic development,each country uses trade policies to protect the development of its own enterprises and create a more favorable trade environment for their own development.China will also be affected by the international economic and political environment in international trade,and take corresponding trade policies to support the development of Chinese enterprises.For example,in the Sino US trade war,in the face of the high tax rate imposed by the US government on China’s export products,we also took countermeasures to raise tariffs accordingly.This has also led to the growth of China’s trade policy uncertainty(TPU),which has an impact on the behavior of foreign investment in Chinese enterprises.Since the reform and opening up,the rapid development of China’s economy is inseparable from the utilization of foreign capital.Among developing countries,China is the largest country to absorb foreign capital.For China,foreign direct investment has the advantages of stimulating exports,creating employment,promoting the optimization and upgrading of industrial structure,accelerating the technological upgrading of local enterprises and promoting the development of domestic economy.For a long time,China’s manufacturing industry has been the main force to attract foreign investment.According to the data of the National Bureau of statistics,the actual amount of foreign capital utilized by the manufacturing industry reached US $41.2 billion in 2018,accounting for about 85% of China’s total industrial FDI.However,from 2019 to 2020,the actual amount of foreign capital utilized by the manufacturing industry decreased to US $35.4 billion and US $31billion respectively,a decrease of 14% and 24% compared with 2018.This shows that the scale of foreign capital actually utilized by the manufacturing industry is decreasing year by year.From the micro level,the cases of many enterprises also show that the proportion of foreign capital holdings in the manufacturing industry has decreased in recent years.This paper adopts the research method of integrating theory with practice and combining qualitative and quantitative methods.Firstly,through literature review,this paper expounds the relevant research of scholars on TPU and the factors affecting foreign ownership.Secondly,it introduces the theoretical basis and influence mechanism of TPU affecting foreign shareholding.At the same time,using empirical analysis means and micro enterprise level panel data to verify the impact of China’s trade policy uncertainty on foreign ownership of China’s manufacturing export enterprises.Finally,from the perspective of government and enterprises,this paper puts forward corresponding suggestions on how to reduce and deal with the adverse effects of trade policy uncertainty,so as to promote the good development of China’s manufacturing export enterprises.In terms of theory,this paper expounds the theoretical basis and influence mechanism of TPU affecting foreign shareholding.According to the analysis of the theoretical mechanism,it can be inferred that the rising uncertainty of China’s trade policy has a negative effect on the shareholding of foreign capital in China’s manufacturing export enterprises.In the empirical aspect,based on the data of A-share Manufacturing Listed Companies in Shanghai and Shenzhen from 2006 to2020,this paper studies the impact of trade policy uncertainty on foreign ownership.The empirical results show that the rising uncertainty of China’s trade policy will increase the possibility of foreign capital withdrawal of China’s manufacturing export enterprises.Further heterogeneity analysis found that the increase of China’s trade policy uncertainty mainly led to the withdrawal of foreign capital from the eastern region and non-high-tech industries.The policy significance of this study is that maintaining the stability and predictability of the policy is of great value for attracting foreign capital under the background of the continuous improvement of China’s business environment.