Direct Investment In China Research Articles

Direct Investment of Foreign Capital in China and its Future Development

Since the reform and opening up, foreign direct investment in China has developed rapidly. In the past decade, more and more regions in China have been implementing policies to introduce foreign investment. Foreign investment in China is mainly in the form of direct investment, which has had multiple impacts on China's economic development. It can be said that it is a double-edged sword, bringing both opportunities and huge challenges to China. We should adopt the correct way to utilize FDI and maximize its positive role. This article provides a simple and concise analysis of the basic situation of foreign investment research in China.

The Economic Role of Technology in International Trade: Theory and Practice in the Trade War

Scientific purpose. The aim of the article is to analyze the impact of technological changes and restrictions on the freedom of technology transfer in the contemporary world economy on international trade in the context of the trade conflict between the United States and China. Research process and methods. Interrelationships between the role of technological changes and trade, the issue of monopoly rent resulting from the technological advantage of some countries, were examined on the basis of the theory of international trade (Ricardian model, Heckscher-Ohlin) and subsequent theories, in particular the approach of Posner, Krugman, Melitz. To analyze the problem of technology transfer limitations in the modern world economy, mainly due to China's trade practices, a quantitative and qualitative method was used as well as a review of statistics of international trade in high-tech goods. Foreign direct investment in China was conditioned by the transfer of knowledge and advanced technologies from the United States. Scientific analysis results. Technological changes and the spread of technology as a result of the intensification of international trade are associated with a specific impact on the benefits and losses for the state with a technological advantage as a result of the phenomenon of "learning by doing". To examine the economic effects of the growing importance of technology in international trade, the theoretical and empirical approach to analyzing the demand in selected countries, including the United States, European Union countries, Japan and China, for the level of employment and wages of highly qualified labor force was used. Conclusions, innovations, recommendations. Further research should cover issues related to the influence of states on supporting the development of advanced technologies, which is associated with specific dilemmas regarding the shaping of international trade flows and the impact on the level of wages in the economy.

The impact of administrative boundaries on foreign direct investments in China's Yangtze River Delta region

We investigate the theoretical mechanisms that underpin the influence of administrative boundaries on foreign direct investment (FDI), taking into account the dual impact of administrative boundary effects. Using panel data from Yangtze River Delta counties collected between 2011 and 2019, we empirically investigate administrative boundaries' effect on FDI within these regions. The findings show that from 2011 to 2019, China's Yangtze River Delta had a consistently positive but moderate global Moran's I index, indicating limited spatial interconnectivity among county-level FDIs. Inter-county FDI in the Yangtze River Delta is hampered by provincial administrative boundaries, with cross-provincial FDI disparities greater than those within the same province. Notably, the Anhui-Zhejiang border experienced a temporary shift from a negative to a positive effect coefficient between 2011 and 2015, whereas other interprovincial boundaries consistently had negative coefficients. The FDI boundary barrier effect is attributed to natural barriers, administrative boundaries, and government performance assessments. In contrast, the boundary intermediary effect results from economic activity diffusion, inter-regional industrial relocation, and inter-regional geographical interaction. This study examines the impact of administrative boundaries on regional economic development through the lens of FDI, intending to provide useful insights for promoting balanced regional development in China and other developing countries. Furthermore, it guides international investors on their ventures in China, attempting to enrich their decision-making framework with strategic perspectives on the country's investment environment.

The impact of oil and global markets on Saudi stock market predictability: A machine learning approach

This study investigates the predictability power of oil prices and six international stock markets namely, China, France, UK, Germany, Japan, and the USA, on the Saudi stock market using five Machine Learning (ML) techniques and the Generalized Method of Moments (GMM). Our analysis reveals that prior to the 2006 collapse, oil exerted the least influence on the Saudi market, while the UK and Japan were the most influential stock markets. However, after the collapse, oil became the most influential factor, highlighting the strong dependence of Saudi Arabia's economic structure on oil production. This finding is particularly noteworthy given Saudi Arabia's efforts to reduce its reliance on oil through Vision 2030. We further demonstrate that China's influence on the Saudi market increased significantly after the 2006 collapse, surpassing that of the UK. This is attributable to the substantial trade between China, Japan, and Saudi Arabia, as well as the rise in Saudi foreign direct investment in China, and the decline in such investment in the UK post-collapse. Our results carry important implications for stock market investors and policymakers alike. We suggest that policymakers in Saudi Arabia should continue to diversify their economy away from oil and strengthen economic ties with emerging markets, particularly China, to reduce their vulnerability to oil price fluctuations and ensure sustainable economic growth.

数字经济对我国外商直接投资的影响研究

数字经济对我国外商直接投资的影响研究

Effect on high-quality economic development of foreign direct investment in China from the triple perspectives of financial development

High-quality economic development focuses on achieving effective qualitative improvement and reasonable quantitative growth in the economy, which is the essential way for China to achieve sustainable development. This paper aims to investigate the role of financial development in the impact of foreign direct investment on high-quality economic development. GDP and green total factor productivity are used to measure the quantity and quality of economic development, respectively. We construct benchmark panel regression models, nonlinear interaction term models, and panel threshold models to examine the threshold effect of FDI on high-quality economic development based on the scale, structure, and efficiency of financial development. A series of tests are conducted to check the robustness of the estimates. Our results show that green total factor productivity in China is primarily driven by green technology progress. Additionally, foreign direct investment has a positive impact on China's high-quality economic development, with a threshold effect and nonlinear characteristics. Specifically, the scale of financial development affects the influence of foreign direct investment on the quantity of economic development, while the efficiency of financial development affects its influence on the quality of economic development. Furthermore, the structure of financial development affects both the quantity and quality of economic development. This study presents novel findings that contribute to understanding the role of financial development in the impact of foreign direct investment on high-quality economic development. Likewise, our research has implications for achieving high-quality development. The introduction of foreign direct investment under the high-quality development of the economy should comprehensively consider financial development.

Empirical Analysis of Export Tax Rebate on Inwards Foreign Direct Investment in China

Export tax rebate (ETR) and inwards foreign direct investment (IFDI) are important driving forces for the steady development of China’s export-oriented economy. Based on data from 2004 to 2019, this study puts forward relevant assumptions on constructing a model for empirically analyzing the impact of the ETR on China’s IFDI from the perspective of the national and the sub-national. The result demonstrates that there exists a complementary relationship between the ETR and IFDI; the weak lag effect of ETR on IFDI in the eastern, middle, and western regions of China; an explicit impact on the performance in the western region, which lags behind only one period; and no significant lag effect of ETR on IFDI in developed, moderately developed, and underdeveloped regions. On the basis of this evaluation, the conclusion could be achieved that that ETR has a significant effect on IFDI, though there may be differences in the direction and value of the impact. The highlight of this research is to detect the impact of ETR on IFDI by taking China as a case, and achieved that there exist sub-national differences, including the geographical and development-level differences.

중국과 주변 접경국 간 경제 관계를 통해 본 북·중 경제 관계 평가

This study poses the research question, “How would North Korea-China economic relations, which have traditionally been evaluated from a bilateral perspective, be different if they were evaluated from a multilateral standpoint with one of China’s bordering countries?”. Based on analysing of economic relations, including foreign trade between China and its 14 bordering countries and foreign direct investment in China’s 13 bordering countries, this study examines North Korea-China economic relations from a multilateral viewpoint. In conclusion, North Korea-China economic relations are seen to be based on the homogeneity of “socialism” and the strategic management of North Korea risks for China’s “core interests” and North Korea’s strategic interests of regime stability and economic development. Compared to the economic relations between China and its other bordering countries, the analysis does not reveal any differentiating factors that make the DPRK-China economic relationship a unique economic relationship based on the traditional bilateral relations of blood ties and nepotism. Rather, China has reaffirmed that it prioritizes its core interests in expanding economic ties with its bordering countries.
 Under President Xi Jinping’s third term, China’s internal and external projects, including the Belt and Road Initiative, a comprehensive version of the country’s open door policy, have gained more momentum under the umbrella of great nation building. Economic relations between China and its neighboring countries have entered the “do-or-die” phase. However, North Korea-China economic relations are still at the stage of dawangyanghui (韜光養晦) and are likely to continue their quiet cooperation for the future. China’s embracing of North Korea, despite the current international political and the economic situation can be interpreted as a management decision to minimize risks to its core interests based on socialist homogeneity.
 In response to the changing international political and economic environment, China has moved away from the traditional blood brotherhood and hammer-and-sickle relationship with North Korea to develop a new, forward-looking relationship with the DPRK that is in line with the current international order. Therefore, it is necessary to objectively and comprehensively evaluate the economic relationship between North Korea and China from the perspective of a multilateral relationship as one of the bordering countries facing China, rather than the traditional, unique relationship.

Beyond as bridges: The role of the Chinese voluntary associations in Chinese outward foreign direct investment in Southeast Asia

With the implementation of the ‘Go Global’ strategy and the Belt and Road Initiative, Chinese enterprises have gradually grown into the main force of outward foreign direct investment (OFDI) around the world. Overseas and domestic Chinese voluntary associations (CVAs) have actively promoted inward foreign direct investment in China, while their role in helping Chinese enterprises invest abroad has not been fully revealed. To address this lacuna, we explore the role of CVAs in the foreign direct investment of Chinese enterprises in Southeast Asia and the heterogeneity of their roles based on different types of associations. Our main argument is that CVAs play an intermediary role in shaping Chinese OFDI by facilitating bilateral information exchange and resource matching to enable enterprises' global–local interactions. This research contributes to verifying the impact of CVAs on Chinese enterprises' OFDI and providing implications for both host countries to attract investment and multinational enterprises from China and other developing countries to achieve internationalisation.

Asymmetric role of natural resources dependence, industrialization, and foreign direct investment in China’s economic growth

China’s industrial sector is performing continuously in economic activity, aiding its share in the economy's progression. This study aims to analyze the asymmetric positive-negative shocks' influence of industrial value-added, foreign direct investment, technological innovation and natural resources on China's economic growth. We take the data of the concerned indicators from 1986 to 2019 and apply N-ARDL on the model for empirical short and long-run asymmetric estimation. The findings illustrate the positive effect of industrial value-added on economic growth during positive shock and adverse during negative shock. Similarly, technological innovation is affirmative in the acquisition of economic growth in both conditions of positive-negative shock. In contrast, foreign direct investment and natural resource rents have no growth implication during positive shock, while adversative during negative shock in the short and long run. The error correction term has stabilized the error that arises from the short to the long run. At the same time, asymmetric multiplier plots demonstrate a new equilibrium equation of asymmetric adaptations of economic growth after the positive-negative shocks. In the end, result-based suggestions recommend government and policymakers' attention toward heavy and secondary industries, technology-intensive policies, and adaptation of sustainable resources.

Dynamic discrete choice models with incomplete data: Sharp identification

In many empirical studies, those states that are relevant for forward-looking economic agents to make decisions may not be included in the data to which researchers have access. This problem often arises in the context of declining/booming industries. In this paper, we develop the sharp identified sets of structural parameters and counterfactuals for dynamic discrete choice models when empirical data do not cover realizations of relevant future states. Applying the proposed method to the annual Toyo Keizai database, we study the behaviors of Japanese firms on foreign direct investments in China without observing the future states after Chinese economy slows down.

The Impact of South Korea’s Direct Investment in China on GVC

The Impact of South Korea’s Direct Investment in China on GVC

Study on the environmental effects of two-way foreign direct investment in China’s service industry

A mathematical model was built in this paper to divide the environmental effects of Foreign Direct Investment (FDI) in the service sector in terms of scale effect, structural effect and technical effect. Also, inbound FDI (IFDI) and outbound FDI (OFDI) were put under the same research framework, where the effects of two-way FDI on the emissions of SO2 and chemical oxygen demand (COD) were empirically tested with the 2004-2016 panel data of China’s service sector. The results show that IFDI in the service sector has significantly reduced China’s pollution emissions and improved environmental quality. This is mainly due to the positive technical and structural effects. OFDI in the service sector exhibits different responses to different pollution emission indexes. When there are both IFDI and OFDI in the service sector, SO2 emissions are suppressed to a certain extent, whereas COD emissions are not effectively controlled. In addition, the increased service output scale, per-capita capital stock and R&D input also have varying effects on environmental pollution in China.

Have environmental regulations restrained FDI in China? New evidence from a panel threshold model.

This paper aims to investigate the effect of environmental regulations on inward foreign direct investment in China. For this purpose, a panel threshold model was constructed to assess the threshold effects of environmental regulations on the influx of foreign direct investments (FDI) . The findings indicate that, under the influence of human capital, the impact of environmental regulations on FDI in China was characterized by a V-shaped curve, indicating an initial inhibitory effect followed by a subsequent increase. A plausible explanation is that specific pollution-generating FDI must withdraw from China because of stringent environmental regulations before human capital reaches a certain threshold level. Meanwhile, impaired by the adverse selection effect, some cleaner-production FDI cannot easily enter China. As a result, environmental regulations in this stage have an inhibitory effect on FDI in China. However, part of the pollution-generating FDI is converted into cleaner production after the human capital level reaches the threshold limit. Further, due to the positive selection effect, additional cleaner-production FDI can also enter China from different destinations. At this stage, environmental regulations boost overall FDI entering China.

ОСОБЕННОСТИ ИНВЕСТИЦИОННОЙ ПОЛИТИКИ СТРАН БРИКС (НА ПРИМЕРЕ КНР И ИНДИИ)

The member countries of the BRICS association have a huge impact on the markets due to the following factors: their combined area is 27% of the world’s land surface (which determines the presence of significant reserves of various natural resources), the total population is 41.5% of the total world population. All countries, with the exception of South Africa, are among the top ten in terms of gross domestic product. Taking in to account these factors, the countries have great potential for economic growth, which is currently being most dynamically realized by China and India. In addition to using domestic potential, these states actively attract foreign investment. Their experience is of interest to the countries of the Eurasian Economic Union. The article analyzes the features of investment policy and attraction of foreign direct investment in China and India. The application of general theoretical and special research methods contributed to the achievement of the tasks set. The Russian Federation is interested in the experience of China and India in dividing all spheres of the economy according to the degree of openness to foreign investment.

Research on the Impact of Digital Economy on Foreign Direct Investment in China

Research on the Impact of Digital Economy on Foreign Direct Investment in China

Changes and Prospects of China-ASEAN Bilateral Economic and Trade Cooperation under the COVID-19 Epidemic

Since the establishment of dialogue between China and ASEAN countries in 1991, bilateral relations have been good, and economic and trade cooperation has continued to climb. Especially after “the Belt and Road Initiative” was put forward in 2013, the scope of economic and trade cooperation between China and ASEAN has been continuously expanded, and the quality of cooperation has steadily improved. However, with the global outbreak of COVID-19 in 2020, the bilateral economic and trade cooperation between China and ASEAN has changed to varying degrees. In this paper, the method of statistical inference is used to study. The results show that under the COVID-19 epidemic, China's direct investment in ASEAN has not been affected on the whole but has shown a significant increase in two consecutive years; From a national perspective, China's direct investment in the Philippines, Laos, and Thailand, Indonesia, Vietnam and Singapore's direct investment in China have also increased significantly for two consecutive years. Still, the direct investment in China from the Philippines, Malaysia, Myanmar, Indonesia, and Brunei has dropped significantly for two consecutive years. To better adapt to the normal development of the epidemic, continue to implement the Belt and Road Initiative, and realize the leap of high-quality cooperation between China and ASEAN, this paper puts forward the need to deepen the cooperation between China and ASEAN in the fields of health care, infrastructure construction, and digital economy.

Political uncertainty and foreign direct investment—Evidence from the government official vacancy in China's cities

AbstractThis study focuses on a new political uncertainty phenomenon, that is, the government official vacancy, and examines its effects on foreign direct investment in China's cities. Using hand‐collected data about the vacancies of the municipal party secretary in China from 2003 to 2018, we find that the government official vacancy reduces foreign direct investment. A one unit (month) increase in the government official vacancy leads to a −2.225% decrease in foreign direct investment. Second, we show three possible channels through which the government official vacancy reduces foreign direct investment: reducing government efficiency, increasing economic policy uncertainty and increasing corruption. Finally, our results show that the effects of government official vacancies on foreign direct investment are stronger in cities with a strong media environment, cities with a low level of innovation and entrepreneurship and cities in the middle region of China. Our main results pass a series of robustness tests. Overall, our research offers novel evidence that political uncertainty has a negative impact on foreign direct investment.

Effect of Land Marketization Level and Land Prices on Foreign Direct Investment in China

With the increase in China’s land marketization level, the fundamental role of pricing mechanisms in optimizing the allocation of land resources has received greater attention and has affected foreign direct investment (FDI). This paper analyzes the effects of land marketization level and land prices on FDI using a mediation model based on data on primary land market transactions in 256 cities from 2003 to 2019. The results indicate that the land marketization level, land prices, and FDI are all increasing, with regional heterogeneity. Compared with low-level cities, the land marketization level and land prices in high-level cities have increased the most. Low-level cities have become new hotspots for FDI, whereas high-level cities remain the main destinations for FDI. Both land marketization levels and land prices significantly promote FDI. Land marketization level exerts a weak direct positive effect on FDI in high-level cities but a strong indirect positive effect on FDI in high-level cities through land prices in general. The results of this study enrich the literature on the location decisions of multinational corporations and may serve as a reference for China and other developing countries in developing policies to attract FDI.

Does Digital Transformation in Manufacturing Affect Trade Imbalances? Evidence from US–China Trade

In the new era of the Fourth Industrial Revolution, digitalization has progressively transformed manufacturing and further affected the balance in international trade patterns. This study assesses whether and how the digital transformation in manufacturing contributes to trade imbalances. Using detailed industry-level data from the US, this study constructs an integrated evaluation to measure the level of digital transformation in manufacturing and investigates the ways in which digital transformation in manufacturing affects the US–China trade imbalance. Empirical results show that the US digital transformation in manufacturing is positively associated with the US–China total trade imbalance, which in turn is negatively associated with their related-party trade imbalance. The further analysis presents a moderated mediation model that includes the US-imported intermediate input from China (mediator for the US–China total trade imbalance), foreign direct investment in China by the US multinationals (mediator for the US–China related-party trade imbalance), and Chinese important manufacturing policy (moderator) simultaneously. The results reveal that the Chinese important manufacturing policy moderates the mediation process and the moderated mediation effect is stronger for the industries which are not involved with this policy. Our findings are informative for developing digital transformation strategies for both manufacturing firms and government authorities.