Yonghui Han

Extant research has explicitly recognized the importance of the compatible environment in the context of globalization. Sister-city partnership has long been developed for the establishment of such a favorable environment to facilitate international investment. Using a panel data set that covers 66 Belt Road countries and 75 non-Belt Road countries from 2006 to 2017, we investigate the impact of sister-city relationship between China and her partner countries as well as its interactive effect with Chinas’ recent global home institution, BRI on the Chinese outward FDI. We find consistent evidence that both sister-city partnership and BRI promote the Chinese outward FDI while these effects are rather complementary than supplementary to each other. Further, we find that the positive impact of BRI seems to be more pronounced in privately owned enterprises (POE) rather than state-owned enterprises (SOE), which suggests that BRI at this stage is more market-oriented and less political-oriented. Our findings suggest that the policymakers should hold more open attitudes towards the establishment of sister-city partnership and towards the Belt Road Initiative to promote more Chinese outward foreign investment so as to deepen the bilateral economic cooperation.

With the implementation of the Belt and Road initiative, the development of trade governance between China and countries along the line has expanded. Firstly, this paper analyzes the impact of cultural exchanges through Confucius Institutes on regional trade cooperation from three dimensions: improving cultural identity, reducing trade costs and sharing information. Secondly, we utilise data trade data from the 64 countries along the line from 2004 to 2015 to examine the effects of Confucius Institutes in regional trade cooperation with China. Overall, we found that Confucius Institutes have significantly promoted the trade growth of China and those countries. Compared to exports, Confucius Institutes promote greater growth imports to the Belt and Road countries from China. Compared to countries in the Road, Confucius Institutes better promoted trade growth between China and countries in the Belt. This empirical conclusion stands under various robustness tests. Forth, after the 12th five-year-plan, the promoting effects of the Confucius Institute has been strengthening. Fifth, the smaller the cultural distance, the stronger the promoting effects of the Confucius Institute on the trade in BRI countries. However, the effect of language similarity is not significant. This study indicates that the Chinese government should pay more attention to the economic effects of cultural factors, such as the Confucius Institute, in policy design.

Does outward foreign direct investment (OFDI) create (or transfer) employment in (or from) the home country? To examine this question, we analyze how OFDI with different motivations influences employment in the home country, using micro data from 552 Chinese manufacturing enterprises investing abroad. We use two sets of indices, namely, the absolute employment amount and relative employment amount, and adopt a difference-in-differences methodology. Overall, we find that OFDI increases both the absolute and relative employment amount. In particular, market-seeking OFDI increases the absolute employment amount, but not the relative employment amount. Technology-seeking OFDI significantly promotes both absolute and relative employment amount of the parent firm in the home country, while resource-seeking and efficiency-seeking OFDI have no significant influence on employment at enterprises in the home country. The effect on home-country employment depends on the host country. Finally, investment in developed countries can significantly increase home-country employment, while investment in developing countries does not have a significant influence on home-country employment.

Guangzhou, an international trading hub, plays an important role in the development of Belt and Road Initiative (B&R Initiative). We select the Export Similarity Index and Trade Intensity Index (ESI and TII) for trade and investment, and analyse the interconnectedness between trade and investment in the aspect of capacity cooperation between Guangzhou and countries along B&R, basing on the PVAR model. The result shows that the increase of investment and trade of Guangzhou has remarkably positive influence on the future ones of the countries along the B&R. We suggest that Guangzhou insist on attracting foreign investment and opening to the outside world, and consider carefully about the complementary relationship between trade and investment for capacity when establishing the related policy.

When an enterprise is operating globally, it will surely lead to the flow of production factors, and thus change the factor income distribution in the home country. This paper studies the influence of FDI on the labour share in enterprises’ home country under the background of continuous economic globalisation. Based on the theory of Heterogeneity of FDI Motivation, this paper first analyzes the influence mechanism of FDI on home country labour share. Then, with the micro data of Chinese enterprises, this paper adopts Mahalanobis distance matching and Difference-in-Differences (DID) estimation to have empirical test on the influence of FDI on the labour share in enterprises’ home country. The results show that, overall, enterprises’ FDI and labour share in the home country present a negative correlation. In terms of heterogeneity of FDI motivation, market-seeking FDI significantly decreases the labour share in the home country, while resources-seeking and technology-seeking FDI significantly increase the labour share in the home country. From the perspective of host country heterogeneity, FDI in developed countries significantly increases the labour share in the home country, while the FDI in developing countries inhibits the increase of labour share in the home country.

Guangzhou, a frontier city of reform and opening up, has a pivotal status in the development of the Belt and Road Initiative and it is critical to promote the global production capacity cooperation of B&R Initiative by inspecting the degree of production capacity cooperation between Guangzhou and countries along B&R. As a result, this paper divides the 65 B&R countries into six geographical regions according to the classification of Statistical Bulletin of China's Outward Foreign Direct Investment to calculate the dependence degree of trade and investment between Guangzhou and the six regions based on the Trade Intensity Index. The result shows that Guangzhou has the strongest trade complementary with Central Asia and Western Asia and faces new opportunities of trade cooperation with ASEAN and South Asia.

Trade and investment are significant aspects in economic cooperation between Guangzhou and BRI (Belt and Road Initiative) countries. To solve its economic dilemma in export and manufacturing sector, Guangzhou should try to identify the BRI regions to promote overseas production capacity cooperation, especially in trade and investment. By dividing the BRI countries into six regional groups and using a modified ESI (Export Similarity Index) model, this paper aims to examine the level of competition between Guangzhou and various BRI regional groups from perspectives of trade and investment. From the results, we find that Guangzhou has the highest competition level with ASEAN and South Asian countries in trade while in investment, ASEAN and Central and Eastern Europe are the most potent competitors for Guangzhou. We think there are insightful implications within the empirical analysis and could promote the efficiency of Guangzhou's trade and outward investment under the BRI framework.