Abstract
The Chinese outward direct investment has experienced a dramatic growth worldwide under the Belt and Road Initiative (BRI) framework in the past few years, and naturally this growing Chinese capital also fosters the cooperation between Central East Europe (CEE) region and China. This research examines diversity of determinants holding impact on Chinese FDI flows from 2009~2018 in CEE region with implementation of panel data analysis, and our result partially explains what cause the heterogeneity concerning amount and density of Chinese capital in CEE countries. Our findings suggest us that generally countries with superior capacity in manufacturing sector and better performance in exportation are preferable capital destinations since Chinese investment is dominated by purposes like EU market access, relieving industrial overcapacity, industry upgrading, and a more effective integration of global industry chain. It is also illustrated in our findings that, from a macro perspective, it is intrinsic and inherent factors of individual economies and political concerns, rather than short-term financial factors, like financial market volatility, that could significantly determine the Chinese capital outflows in this region.
Highlights
Since 2013 Belt and Road Initiative (BRI) has been proposed by the Chinese government as an essential global development strategy for enhancing connectivity and cooperation among countries multilaterally in diverse fields
5.2 Conclusions and Advice in Particular Field In aspect of industrial structure, our findings illustrate that Chinese capital prefers Central East Europe (CEE) economies with superior capacity in the manufacturing sector, especially in high-middle-end industry, because Chinese investors intend to exploit the geographic superiority in this region- integrated with relatively low cost and abundant experience in industrialization - for their overseas market expansion and upgrading in industrial structure
The fact that countries with higher export to GDP ratio and lower import to GDP ratio are found to be preferable destinations for Chinese capital partially proves that China treats CEE countries as an intermediary for overseas market access and releasing its overcapacity in industrial productivity
Summary
Since 2013 Belt and Road Initiative (BRI) has been proposed by the Chinese government as an essential global development strategy for enhancing connectivity and cooperation among countries multilaterally in diverse fields. This ambitious strategy prompts Chinese investors to concentrate more on collaborations with partners in emerging economies like countries in Center-East Europe (CEE) for further business expansion. According to Statistical Bulletin of China’s Outward Foreign Direct Investment (2019), published annually by China’s ministry of commerce, China’s FDI outward has increased by 53 times in flows, and 66.3 times in stock, during 2002~2018
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