Study On The Influence Of ASEAN Soft And Hard Power On OFDI Of China’s Manufacturing Industry

Over the past 40 years of reform and opening up,China’s manufacturing OFDI has achieved rapid development,and the flow of foreign direct investment has increased from less than 500,000 US dollars in 1979 to 26.87 billion US dollars in 2021,an increase of nearly 53,740 times.As the second largest investment region of China,ASEAN has a close relationship with China,and the OFDI of China’s manufacturing industry to ASEAN has increased from US $290 million in 2007 to US $8.62 billion in2021,expanding by nearly 30 times.Since 2019,manufacturing has become China’s largest investment sector in the region.However,due to the complex and changeable foreign trade environment,in the process of strengthening OFDI to ASEAN,China has not only development opportunities,but also faces many challenges and is affected by many factors.Firstly,the paper combs the relevant literature and puts forward the research content of this paper.From the perspective of soft and hard power,further clarify the influencing factors of China’s manufacturing industry on ASEAN’s OFDI.Secondly,from different dimensions such as scale,location and industry distribution,the present situation of China’s manufacturing industry on ASEAN’s OFDI is investigated,and the influencing factors are analyzed theoretically.Based on the panel data of ASEAN from2007 to 2021,China’s manufacturing OFDI is taken as the explained variable,and the host country’s economic freedom,social governance level and cultural distance are taken as the explanatory variables of soft power.With the host country’s factor endowment and physical infrastructure as explanatory variables of hard power,the fixed-effect model and the heterogeneity analysis and robustness test are used to empirically investigate the influence of host country’s soft and hard power on China’s manufacturing OFDI.The main research conclusions are as follows: First,in terms of soft power,the economic freedom and governance level of the host country significantly promote the OFDI of China’s manufacturing industry,but the cultural distance shows a significant inhibition.Second,in terms of hard power,the labor factor and capital factor of factor endowment have a significant positive effect,while natural resources and technology have a significant negative effect.The transportation and communication infrastructure has a significant positive effect,while the energy infrastructure has a significant negative effect.Thirdly,from the perspective of OFDI heterogeneity of manufacturing industry at different technical levels,technical factors and capital factors have no significant effect on low-tech manufacturing industry,and the other factors are consistent with the OFDI significance of the overall manufacturing industry.Fourth,in terms of control variables,both the market size of the host country and the policy uncertainty in China have significant positive effects.Finally,based on the above research conclusions,it is proposed to expand the scale of manufacturing OFDI to improve the level of regional economic development.Attach importance to technological factor endowment to promote the transformation and upgrading of China’s manufacturing industry;We will deepen infrastructure cooperation and improve comprehensive modernization.