Zhongyun Communications
Investment Analysis Series 01
Principles for constructing an index system for investment climate assessment
It is directly related to the scientificity, objectivity, accuracy and reliability of the research conclusions, and whether it can provide a quantitative and operable basis for decision-making departments. Taking into account China’s national conditions and the regional conditions of various regions, according to the current domestic and foreign investment theories and factors affecting investment in China and various regions, and in accordance with the idea of system theory, in order to facilitate the support of investment evaluation research methods, and to scientifically, objectively, fairly, and comprehensively reflect the situation of the regional investment environment and measure the quality and level of the regional investment environment, the following principles should be followed and implemented when researching, selecting, and constructing an evaluation index system:
1.1 Comprehensiveness 
The investment environment system is a multi-level organizational system composed of multiple factors, and at the same time it is affected and constrained by many factors inside and outside the system. The investment environment index system has the characteristics of a wide range and a large amount of information, which requires us to select all kinds of indicators at all levels as comprehensively and completely as possible when selecting indicators, and to combine investment hard and soft environment indicators, aggregate indicators, relative indicators, and average indicators, and qualitative and quantitative indicators. The purpose of this is to reveal, describe, and reflect the advantages and disadvantages of the overall situation of the investment environment system from all aspects and levels as much as possible, and to measure the level and quality of the investment environment, so as not to omit some important information, cause one-sidedness, and lead to non-scientific evaluation results.
1.2 Simplicity 
As mentioned earlier, the selection of investment climate indicator systems follows the principle of comprehensiveness, but this does not mean that the selection of indicators must be comprehensive, repetitive and cumbersome. On the contrary, the selection and setting of indicators should consider typicality and representativeness, try to exclude indicators with the same meaning or large correlation, use indicators with as little but as much information as possible to reflect multi-faceted problems, and organically combine comprehensiveness and conciseness to avoid duplication and cumbersomeness and cause multiple collinearity or sequence correlation in evaluation.
1.3 Science
Every indicator in the investment environment system has a definite and scientific profound connotation. The establishment of the index system should be based on the intrinsic relationship between the investment environment itself and economic and social development, and in accordance with the scientific theories and principles established by the investment environment evaluation theory and the statistical index system, and select specific, reliable, and practical indicators with accurate meaning, easy to understand, and easy to synthesize calculation and analysis, so as to objectively, fairly, comprehensively, and scientifically reflect the essence and regularity of the regional investment environment.
1.4 Systematic
The investment environment system is an organic whole composed of elements with certain structure and function. Indicators and indicator systems are not a static and absolute concept, but a relative, constantly and dynamically evolving concept. Therefore, when selecting and determining specific indicators to construct an indicator system, it is necessary to comprehensively consider the integrity, dynamics and systematization of the investment environment, not only select indicators that reflect and measure the development of various subsystems within the system, but also include environmental indicators (such as policy variables, etc.) that reflect the coordination of various systems and the outside of the system. There should be static indicators that reflect and describe the state of the investment environment system, and dynamic indicators that reflect and measure the improvement of system quality and quality. At the same time, with the passage of time, changes in location and different actual conditions, the indicator system can adapt to the needs of dynamic development and change.
1.5Comparability 
The construction of the index system should facilitate the comparison of various regions in China by drawing on and absorbing the research experience and achievements at home and abroad, and can be adjusted appropriately to facilitate international comparison, and at the same time can be dynamically compared. This requires that when selecting an indicator, it is necessary to take into account the historical continuity of the indicator and at the same time consider the possibilities of supporting analysis and forecasting. Therefore, in order to enhance the comparability of the investment environment in different regions, it is necessary to accurately analyze and study statistical data and their meaning, refer to statistical yearbooks and other relevant yearbooks and literature, and select relative indicators and average indicators with relatively consistent scope and caliber, and also select some aggregate indicators, on the one hand, to ensure that the factor variables will not be biased by factors such as economic size, population size or area size, and on the other hand, it can also increase the comprehensiveness and relevance of the index system.
1.6 Operability 
The selection, acquisition, calculation or conversion of index data must be based on existing statistical yearbooks or literature, at least easy to obtain, calculate or convert, and adopt internationally recognized or domestically accepted statistical standards, and the meaning of indicators must be very clear, so as to facilitate effective quantitative analysis and evaluation.