Chapter 1　Introduction

1.1　Background

Since China implemented the reform and opening-up policy，the improvement of China's overall national strength and the formation of China's new opening pattern has improved the level of enterprises' export-oriented internationalization. “Going global” has become the choice of many Chinese enterprises. Since the Belt and Road Initiative was proposed，China has accelerated the pace of developing overseas markets，and outward foreign direct investment（OFDI）has risen sharply. As a rising developing country，the growth rate of China's OFDI even exceeds that of many developed countries，and China has become an emerging source of OFDI. 2020 Statistical Bulletin of China's Outward Foreign Direct Investment released by the Ministry of Commerce of China，National Bureau of Statistics，and State Administration of Foreign Exchange shows that in 2020，China's OFDI flow was US$153.71 billion，and the stock was US$2，580.66 billion，and accounted for 20.2% and 6.6% of the global flow and stock，respectively. Driven by the Belt and Road Initiative and global production capacity cooperation，it is expected that the scale of China's OFDI will continue increasing.

The Belt and Road Initiative has led to significant growth in China's OFDI in infrastructure（OFDII）（Du and Zhang，2018；Jiang et al.，2019）. In 2020，China's OFDI flow was US$25.08 billion，and the stock was US$485.22 billion，accounting for 16.32% and 18.80%，respectively. This field has become an investment hotspot in recent years（Mumtaz et al.，2017；Ding and Sun，2016）.

While China's OFDI is growing rapidly，it is also faced with increasingly fierce international competition and changing international structures，bringing great challenges to the development of overseas Chinese-funded enterprises. At the same time，China's OFDI experience is insufficient. And the enterprise's awareness of risk prevention is weak，and the relevant protection methods need to be strengthened. In general，Chinese enterprises face great risks in “going global”，which significantly affects the scale and efficiency of China's OFDI（Khan and Akbar，2013）. As an essential field of foreign direct investment，infrastructure projects have the characteristics of large capital amount and long investment cycle，which determines that they face more risks than general investment projects（Gransow，2015；Jiang et al.，2019）.

Although the foreign direct investment of multinational enterprises will be affected by risks at home and abroad，as well as the enterprise itself，the investment risk from the host country is considered to be an essential factor affecting the sustainable development of China's OFDI（Wang et al.，2020）. Many scholars have conducted relevant studies on the risk of the host country（Baek and Qian，2011）. However，scholars have paid more attention to the impact of the political risk of the host country on foreign direct investment. Many scholars have conducted more empirical studies on the relationship between political risk and foreign direct investment，while research on economic risk and foreign investment is still insufficient. However，the economic risk may have as much impact on OFDI as political risk（Duanmu，2012）. As Yu（2017）has pointed out，the economic stability and socio-economic conditions of the host country will directly affect the income and security of foreign investment assets，which in turn affects the entry of foreign direct investment. The impact of the frequent international economic and financial crises on the global investment pattern in recent years also fully demonstrates that economic risk is playing an increasingly important role in the world's foreign direct investment. In the post-financial crisis era，the overall economic risk worldwide is still relatively high，but there is insufficient research on economic risk and foreign direct investment. And only some studies focus on the relationship between economic risk and foreign direct investment，ignoring the effect of economic risk on the scale and efficiency of foreign infrastructure investment.

China has become a developing country with the largest inflow of foreign direct investment and a major emerging country with the rapid development of OFDI. This shows that China's overseas interests are expanding rapidly，and it is necessary to pay attention to the overseas investment environment. Considering the continuous expansion of the scale and scope of China's OFDII，how to make more targeted investment choices according to the economic conditions of different countries，and further enhance the efficiency of China's foreign infrastructure investment has become a new issue facing China's opening to the outside world.