Impact of Multinational Corporation Out-migration and Effectiveness of Macroeconomic Countermeasures:Analysis Based on CGE Model
Currently,the world has entered a new period of turbulence and transformation,with increased economic uncertainty caused by great power competition,geopolitical conflicts,and trade frictions,exacerbating the risk of multinational corporations withdrawing from China.Multinational corporation out-migration is related to China's industrial chain security and macroeconomic stability.However,only a few studies have quantified the economic impact of multinational corporation out-migration and researched the effectiveness of related policies.This study measures the degree of multinational corporation out-migration,identifies the path of out-migration impact on the economy,quantifies the economic impact of out-migration based on the Chinese computable general equilibrium(CGE)model that distinguishes between domestic-and foreign-funded enterprises,and evaluates the effectiveness of three types of countermeasures.The study reveals that the average degree of out-migration of the manufacturing industry in 2021 was approximately 1.57％,with high-tech manufacturing having the highest degree of out-migration.From the perspective of macro impact,the out-migration has a significant impact on gross domestic product(GDP)(-1.17％)and employment(-0.78％),with a decrease of 2.40％in domestic demand and a decrease of 0.47％in net exports.In terms of industry impact,the average output of the industry decreased by 0.84％.The output of domestic-funded enterprises has been greatly affected by the negative impact of cutting off technology spillover channels,and foreign-funded enterprises in capital-intensive,export-oriented,and investment goods industries with a high degree of out-migration have been severely damaged.Further,the output of domestic-funded enterprises with a high degree of out-migration industries and foreign-funded enterprises,which have been less directly affected by out-migration,has slightly increased.The out-migration response policy can effectively alleviate the negative impact on the domestic economy and employment and improve the output of foreign-funded enterprises in the high-tech manufacturing industry.However,it also brings problems such as inflation and output losses of low-end manufacturing and domestic-funded enterprises.The economic effects of different policies to stabilize foreign investment vary,and there is significant industry and enterprise heterogeneity.Therefore,policies should be formulated based on the priority of policy objectives to achieve maximum effectiveness.This study has important practical significance for achieving stable macroeconomic development and enhancing the scientific nature of policy formulation.The contributions of this study are as follows.First,it measures domestic and foreign capital stock from 2006 to 2021 and identifies multinational corporation out-migration by changes in industry foreign capital stock.The improvement of indicator measurement methods has enhanced the scientificity and accuracy of this study.Second,this study clarifies the main impact paths of multinational corporation out-migration on the macro economy from a theoretical perspective and constructs a Chinese CGE model that distinguishes domestic-and foreign-funded enterprises.Based on this,it quantifies the economic impact of multinational corporation out-migration in 2021 and reveals the transmission mechanism at the macro level and domestic-and foreign-funded industry level by decomposing the effects of each path.Third,we summarize three types of stable foreign investment policy scenarios by reviewing existing policies,including improving investment preferential treatment policy,optimizing tax environment policy,and reducing corporate financing costs policy,and quantify the economic effects of various policies under the economic environment of multinational corporation out-migration.This study also has some policy implications.First,we must give full play to the role of domestic-funded enterprises in substituting foreign-funded enterprises to reduce the macroeconomic losses caused by multinational corporation out-migration.Second,the government should effectively and accurately implement a combination of policies to stabilize foreign investment and prevent and resolve negative risks caused by policy overlap.Third,we need to closely monitor the phenomenon of high-tech manufacturing multinational corporations out-migration.While strengthening investment incentives and optimizing tax policies for foreign-funded enterprises,we need to pay attention to the potential negative impact on domestic-funded enterprises.Fourth,the government should dynamically monitor the out-migration of labor-intensive low-end industries to prevent negative economic and employment impacts caused by rapid out-migration.
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