Investment Risk Analysis of Southeast Asian Countries along the "Belt and Road" and Countermeasure by Analytic Hierarchy Process


Proposal of "Belt and Road" initiative, along with Framework Agreement on Comprehensive Economic Cooperation between China and ASEAN has had far-reaching and positive impacts on promoting social and economic development of Southeast Asian countries. Nevertheless, there are numerous failure examples of overseas investments and cooperation. Therefore, main factors of investment risks are urgent for Chinese investors to analyze and explore further. To reasonably rank and evaluate investment risk, five typical countries are analyzed by the analytical hierarchy process based on economic condition, debt ability, social environment, legal system, political factors. To improve investment efficiency, investment risks of these countries were ranked. Due to complementary effect between host country and China, Southeast Asian countries are generally suitable for overseas investment. Singapore and Malaysia have lower risk level, Laos and Philippines have moderate risk levels since infrastructure construction level in the two countries is not high, Thailand has slightly higher investment risk. In order to reduce investment risk, some countermeasures should be taken. RMB internationalization should be promoted in order to facilitate overseas trade and investment. To strengthen policy communication, role of multilateral trade agreements can be consolidated and expanded. Learning from advanced international experience, financing insurance system should be constructed.

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