Chinese Industrial Outward FDI Location Choice in ASEAN Countries

Abstract

This paper examined the location choices of Chinese outward FDI (OFDI) from 2005–2016 with a particular focus on the Association of Southeast Asian Nations (ASEAN) countries. It was found that Chinese OFDI in ASEAN countries was generally focused on areas that had large potential markets and low tax rates. Unlike previous studies, it was found that primary and secondary industry labor costs were the main motivators rather than resource-seeking. The business environment in the host countries was also found to have positive and significant effects on Chinese OFDI location choice for the agricultural, mining, construction, and information industries. The insights in this paper could provide useful suggestions for both governments and investors.