Research On The Impact Of Investment Facilitation Level Of RCEP Member Countries On China’s Outward Foreign Direct Investment

In recent years,the world has been undergoing profound changes unseen in a century.After eight years’ negotiations,the Regional Comprehensive Economic Partnership(RCEP),the world’s largest free trade area,was officially launched against the backdrop of the COVID-19 outbreak,severe global economic recession,shrinking international trade and investment,rising protectionism and unilateralism.The conclusion of RCEP will undoubtedly inject strong warmth into the world economy,which is still in the stage of recovery and turbulence,and inject stable expectations into the uncertain world economy.It will boost member states’ confidence in world economic growth and create a broader platform for investment activities among member states.With China moving closer to the center of the world investment stage,China’s outward investment activities are becoming more and more frequent.By the end of 2021,seven of the top 20 countries(regions)in terms of China’s outward direct investment(OFDI)flows and stock are RCEP members,respectively,indicating that RCEP members have played an important role in driving China’s outward investment growth.At the same time,the optimization and improvement of investment facilitation will effectively reduce a series of costs caused by the investment of the home country into the host country.In this context,it is of practical significance to analyze the impact of the investment facilitation level of RCEP member states on China’s OFDI.After reviewing and analyzing relevant literatures on investment facilitation,RCEP and OFDI,this thesis firstly expounds the connotation of investment facilitation,relevant theoretical basis and the influence path of investment facilitation level on OFDI.Secondly,this thesis analyzes and summarizes the current situation of China’s investment in RCEP member countries from three dimensions: investment policy,investment scale and investment structure.Then,this thesis selects five first-level indicators including infrastructure,business environment,institutional quality,financial development and labor market and 22 second-level indicators to reconstruct the evaluation system of investment facilitation level,and uses the principal component analysis method to assign weight to the indicators,and calculates and compares the comprehensive index of investment facilitation level and each first-level indicator index of RCEP member countries in the past ten years.Finally,this thesis constructs an extended gravity model with investment facilitation index as the core explanatory variable,and selects relevant variables such as economic openness of host countries,tax level and GDP to empiricallyanalyze the relationship between investment facilitation level of RCEP member countries and China’s OFDI stock.The findings are as follows:(1)There are significant differences in the level of investment facilitation among RCEP member states,with Singapore,Malaysia and New Zealand ranking the top three on average,while Vietnam,Cambodia and Philippines rank the bottom;(2)The overall trend of investment facilitation in China,Japan and New Zealand is improving year by year,while that in Australia and Thailand is declining year by year.The overall trend of investment facilitation in other countries fluctuates within a certain range.In addition,Singapore ranks the first place in the five first-level sub-indexes of the facilitation index,which shows its strong ability to attract foreign investment.(3)Investment facilitation level,GDP and economic openness of host country all have a positive effect on attracting OFDI of China.Among them,investment facilitation level of host country has the most significant effect,followed by GDP effect of host country,and economic openness has the least effect.(4)The tax level of the host country obstructs China’s OFDI of RCEP member countries,and the influence of the distance between the capital of the host country and the capital of China on the host country’s attraction to China’s OFDI does not pass the 10% significant level;(5)Heterogeneity analysis results show that the impact of investment facilitation level of ASEAN countries on attracting OFDI of China does not pass 10% significance level,while the impact of investment facilitation level of non-ASEAN countries on attracting OFDI of China passes1% significance level,and the impact of tax level of ten Asian countries on attracting OFDI of China passes 5% significance level.However,the tax level of Oceanian countries has no significant impact on attracting China’s OFDI.On the basis of the above analysis,this thesis puts forward the following suggestions:(1)Help the member states’ investment facilitation and promote balanced foreign investment;(2)Enhance investment facilitation in a multidimensional and all-round way,and build RCEP models for global economic development;(3)Take the implementation of the RCEP agreement as an opportunity to further expand the network of free trade areas,continue to expand the "circle of friends" of free trade partners,and promote regional and global economic integration with a pragmatic attitude and solid actions.