Analysis on the Influence Mechanism of RMB Internationalization on China’s OFDI : Based on the “The Belt and Road Country Panel Data” Model

Starting with The B&R countries, this study gathers the macro annual data of 46 economies along the Belt and Road between 2011 and 2019. Using panel data model, this paper empirically studies the influence mechanism of RMB internationalization on China’s OFDI. The results show that the level of RMB internationalization has a positive effect on the stock of China’s OFDI to "The Belt and Road" countries. China’s import and export trade with host countries significantly contributed to the growth of OFDI. The economic development level of the host country has a significant positive effect on OFDI of Chinese enterprises, while the economic distance between China and the host country and the exchange rate fluctuation of the host country have a negative effect on OFDI. Therefore, this paper puts forward the following suggestions: China should continue to promote and deepen the "The Belt and Road" construction, promote the internationalization of RMB and encourage enterprises to invest directly in the emerging markets along the "The Belt and Road". With the "The Belt and Road" as the pilot project, China will radiate to the outside world to enhance China’s economic strength and the international discourse power of its currency. The role of the Asian Infrastructure Investment Bank and the Silk Road Fund should be brought into full play, and financial infrastructure should be improved.