China’s Arable Land Investment in the “Belt and Road” Region: An Empirical Study of Overseas Arable Land Resources

Abstract

Arable land resources are essential for food security and sustainable agricultural development, and an objective and comprehensive evaluation of overseas arable land resources is indispensable to the decision-making of various Chinese enterprises. However, overseas arable land resources and factors influencing China's investment therein have rarely been investigated. In the present study, the authors select eight indexes related to the quantity and quality of arable land and utilize the entropy weighting method and technique for order preference by similarity to ideal solution (TOPSIS) method to comprehensively evaluate arable resources in 48 "Belt and Road" countries for the period 2008-2016. Renewable internal freshwater resources and irrigated farmland area are found to be the primary factors affecting the wealth of arable land resources. Based on this evaluation, the authors conduct empirical tests concerning the main factors affecting the scale of China's investment in foreign arable land using a panel Tobit model. The results show that Chinese companies tend to invest in countries with high levels of arable land resources and low corruption risk. Based on these findings, this study concludes that Chinese enterprises should engage in joint development with host countries and support the sustainability of long-term investment in cultivated land. Note: Countries in the Belt and Road area are grouped in accordance with Zou's [26] classification. Sustainability 2020, 12, 97 4 of 17

Economic Trends in the Transition into a Circular Bioeconomy

“…As prices for agricultural products rise, so do the costs of farmland. With only a few regional exceptions, prices for agricultural land in the EU have increased since 2011 and in some cases even multiplied (Observator Finansowy 2018) and European as well as non-European investors are buying European farmland (Tian et al 2020). One of the top cost drivers is the growing market for bioenergies (Demartini et al 2016;Kirschke et al 2021).…”

Measurement of Investment Potential and Spatial Distribution of Arable Land among Countries within the “Belt and Road Initiative”

“…Despite having roughly one-fifth of the global agricultural territory (approximately 167.5 million hectares), it serves over one-fifth of the global population [1,2]. Since the reform and opening up, China has made significant achievements in agricultural development, becoming the world's largest food producer and achieving the food security goal of basic self-sufficiency in grains and absolute security in the ration [3,4]. However, reducing available arable land resources, the decline of arable land quality, and the slow growth rate of grain yield have also caused China to rely heavily on imports to ensure national food security [2,5].…”

“…Some scholars believe that the investment potential of arable land depends on two factors: one is the amount of arable land-related resources, and the other is the quality of the investment environment [24]. However, other scholars have found that most host countries have low economic and rich arable resources [3]. Hussain et al [25] used the entropy-based the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) method to comprehensively assess China's overseas investment risks and natural resource potential in 63 BRI countries.…”

“…On the other hand, while scholars have evaluated China's overseas arable land investment in recent years [3,47], the existing literature does not comprehensively evaluate the potentialities of evaluating the suitability of the location of the host country for arable land investment. Therefore, it is so difficult to guide the overseas investment layout.…”