Determinants of Chinese Overseas FDI in ASEAN Countries

Abstract

International business activities between China and ASEAN member countries have grown in recent years compared to FDI from developed countries. This chapter presents the findings of a study on the factors that determine those investments. Building on from previous studies, our study examined the following factors: market size, natural resource endowment, strategic assets and institutional factors. Secondary data were collected from authoritative websites to examine the relationship between China’s OFDI volume in ASEAN countries and other variables such as GDP, GDP per capita, GDP growth, patent application numbers, total natural resource rents, political stability, control of corruption and government effectiveness from host countries. The aspects that were confirmed with importance to attract China’s OFDI are GDP, patent application numbers and host countries’ political stability, while aspects that were not in conformance with previous studies are GDP per capita, GDP growth, natural resource rents, control of corruption and government effectiveness.