Impact of China’s Outward Foreign Direct Investment on Its National Image: A Case Study of ASEAN

National image represents the comprehensive power and influence of a country across multiple dimensions in the global arena. How a nation can simultaneously expand its overseas economic activities while gaining broad international recognition and cultivating a favorable national image has long been a central concern in both international political theory and practice. In this study, ten ASEAN countries were used in a regional case study of how China’s Outward Foreign Direct Investment (OFDI) affects its national image in the region. Using data from multiple sources, we constructed a 2003–2022 panel dataset covering China and the ten ASEAN countries and used a two-way fixed-effects model to empirically analyze the OFDI effects, underlying mechanisms, and nonlinear processes. The following results were found: 1) China’s OFDI significantly enhanced its national image in the ASEAN countries, indicating that Chinese firms abroad not only pursued economic gains but also played a crucial role in shaping evaluations of China by host countries. 2) The effect of China’s OFDI on national image varied with the host country income level, industrial structure, and religious-cultural context. The image-enhancing effect of OFDI was more pronounced in countries with lower–middle incomes. With regard to industrial structures, the positive effect diminished in highly industrialized economies. Culturally, Buddhist-majority countries generally exhibited a more favorable response to Chinese OFDI. 3) The mechanism through which China’s OFDI shaped national image operated at macro, meso, and micro levels. At the macro level, OFDI promoted green development and environmental improvement, enhancing institutional recognition of China’s development model. At the meso level, OFDI strengthened recognitions of China’s capabilities and cooperative value through technology diffusion, skills training, and industrial cooperation. At the micro level, OFDI directly affected individual-level perceptions and attributions by generating employment and alleviating poverty, thereby fostering positive emotional responses. Moreover, the positive image effect of OFDI became more pronounced when the number of inbound tourists from the host country exceeded a certain threshold. This study contributes to the literature in two main ways. First, it theoretically integrates essentialist and constructivist perspectives, addressing both the objective economic and social effects of OFDI and its role in cognitive construction through cross-national interactions, thereby systematically revealing the multidimensional mechanisms through which investment influences national image. Second, in terms of regional selection, the ten ASEAN countries constitute a distinctive “small yet comprehensive” setting for examining the impact of OFDI on national image. On the one hand, the region features a complex geopolitical landscape in which major powers such as China, the USA, and Japan interact and compete closely, providing a multifaceted real-world context for assessing how China’s OFDI contributes to building national image. On the other hand, ASEAN exhibits pronounced internal heterogeneity in levels of economic development, industrial structures, and cultural traditions, ranging from high-income service-oriented economies (e.g., Singapore) to low-income agriculture-based countries that retain strong traditional cultural characteristics (e.g., Laos). This diversity offers a rich empirical basis for investigating the heterogeneous effects of OFDI under different economic and cultural conditions and unpacking the macro-, meso-, and micro-level mechanisms through which these effects operate.