Abstract: Political risk is the main risk of foreign direct investment of Chinese Enterprises. The paper used government stability, corruption and internal conflicts as the proxies of ASEAN-specific political risks, multiplied the variables of enterprise investment motivation including market-seeking motive, resource-seeking motive and efficiency-seeking motive respectively and used 2003-2015 panel data to analyze the effect of political risks on China′s investment in ASEAN. The findings show that resource-seeking firms are most sensitive towards political risks, and its “evasion effect” to political risk is only a dimension of internal conflict; market-seeking firms are less sensitive than resource-seeking ones towards political risks; efficiency-seeking firms are least sensitive.

Key words: political risks;investment motives, Gravity Models, aversion effect