The authors have conducted a survey to clarify FDI by Chinese enterprises in Thailand. The\naim of our research is to verify the hypothesis that avoiding trade friction is an important\ndeterminant of China�s outward FDI, through detailed investigation of individual project.\nAnother aim is to confirm the trends of exports of the items involved from both China and\nThailand. We discuss the role of FDI investment in relation to the behavior of the enterprises\ninvolved. Literatures indicate that multiple factors influence FDI, including trade barriers. We\nanalyzed individual investment data from the BOI of Thailand. We found that, during 2007 to\n2014, 94 projects out of a total of 240 intended to produce items which caused trade friction\nwhen exported from China. In fact, 12 of these 94 projects announced that they invested in\nThailand to avoid trade frictions. Based on these results, we conclude that a substantial\nportion of China�s outward FDI in Thailand is to prevent trade friction by aiming to export\nfrom Thailand. Exports of such goods from China continue to increase, whereas exports from\nThailand are stagnant. A plausible explanation is that these investments were conducted by\nless competitive enterprises in China.
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