Investment Risk Analysis and Countermeasure in Five Central Asian Countries for Chinese Investors

Abstract

With rapid progress of the “Belt and Road” initiative, China has become a capital exporter. More and more Chinese investors are increasing their overseas investment. Thus, investment risk assessment is very important. Central Asia is a key hub connecting the Europe and China. Cooperation between Chinese and Central Asian countries have bilaterally promoted rapid economic development. For Central Asian countries, there are many investment risk points. But in a comprehensive way, the main influencing factors include economic condition, debt ability, social environment, legal system and political factor. In order to improve the investment efficiency, this paper uses analytic hierarchy process to study the investment risks of the five Central Asian countries, and puts forward some countermeasures. Generally speaking, Central Asian countries are generally suitable for overseas investment. Kazakhstan and Uzbekistan have lower risk level. Tajikistan and Turkmenistan have moderate risk level since infrastructure construction in the two countries is imperfect. The investment risk of Kirghiz Tanzania is slightly higher. In order to reduce investment risks, China should promote RMB internationalization so as to facilitate overseas trade and investment. Strengthening policy communication can consolidate and expand the positive role of multilateral trade agreements. In addition, learning from advanced international experience, China can build a financial insurance system to reduce investment risk.