| Trade and investment has been a hot topic in the field of contemporary international trade. In1957, American scholar Robert A.Mundell initially proposed the investment substituting trade model and attention has been paid to the relationship between investment and trade by many scholars since then. Besides the supplement and development of the substituting theory in theoretical circle, the marginal industry expansion theory proposed by Japanese economist K.Kojima(1981) is the most representative theory of trade and investment complementary theories study. This theory suggests that foreign investment can create trade, as well as destroy it. There are also some scholars who find that the relation between investment and trade is uncertain, but this theory does not belong to the mainstream of study. That is to say, theories about the relation between investment and trade can be generalized into two kinds at present:investment substituting trade theory and investment creating trade theory. However, these theories all develops in the direction of the substituting or creating of domestic trade from the investment of developed countries themselves. Since the1980s, the investment of developed countries to developing countries has been on the rise, and developing countries have gradually become the main investment destination of developed countries with the emergence of newly industrialized countries and the rise of developing countries in the world. Particularly, the rapid development of economy caused by China’s utilization of foreign investment has drawn wide attention from scholars at home and abroad. Scholars begin to study the effect of investment from various angles and have got many new achievements. Chinese scholars have made a lot of research from theoretically and empirically to study the impact of foreign direct investment on China’s economy and trade. But these studies mainly concentrate on the influence of world’s direct investment on China’s trade scale and competitiveness, only few scholars have studied the effect of direct investment on China’s trade structureThis paper mainly studies the influence of FDI on China’s trade structure and chooses the influence of EU’s direct investment on China’s trade structure as object. The reason of choosing EU is that, China and EU are all the leading roles of the world economy. Made up of28developed economies, EU is the largest economy and most successful regional economic integration organization in the world by far. China is the world’s fastest growing and largest developing economy. On November21,2013, when meeting European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso in the Great Hall of the People, Premier Li Keqiang points out in the China-EU cooperation2020strategic planning that:"China-Europe trade and economic relations is one of the world’s largest and most dynamic economic and trade relations. Two-way trade and investment has become the mainspring of Sino-EU respective economic development and innovation. China and EU are shouldering the important responsibility of continuing to pull the world economic growth and realizing common prosperity. Both sides are committed to shaping a innovative, development-linked and interest-integrated world economy and determined to maintain and develop the open world economy. Therefore, based on the spirit of mutual benefit, China and EU are determined to further deepening the trade and investment relations in2020, to promote the open and transparent of the market and make a fair market competition environment. Provide small and medium enterprises with more opportunities." This is also the significance of this paper.Compared to previous studies, this paper would mainly talk about three questions:Firstly, what’s the influence of FDI to the trade structure of the host country? Secondly, what’s the complementarities and difference between the trade structure of China and EU? Thirdly, what’s the influence of EU’s FDI on China’s trade structure?The innovation of this paper is also centered on these three issues:Firstly is to explore and build the theory model towards FDI and the change of host country’s import and export structure, and make theoretical analysis on the influence mechanism of trade structure thus trying to make general theoretical explanation on FDI and the change of host country’s import and export structure. Secondly, using statistical methods to sum up the EU15countries and11new joined members’(without Cyprus whose research materials can’t be found) investment and China’s import and export structure, we researched..contrasted and cleared up the difference and complementarities of the trade between China and EU. Thirdly, we use the data, statistics and the theory models to carry out empirical test.This paper follows the logical structure of literature review---bilateral research status contrast---theory study----empirical study.In the first part, based on the comprehensive literature review and use the OECD, we divide different industries by technological level into high technology industry, middle-high technology industry, middle-low technology industry and low technology industry. In this paper, we put emphasis on the industries that are largely related to the four kinds of industries above and elaborate the development and status of EU’s investment in China and the import and export of products of different technological level Firstly we conclude the change in China and EU’s total amount of import and export since1992. And make analysis on the statistics of the proportion of those four kinds of products according to the original15countries and13newly joined countries, thus knowing the change of China’s structure of import and export with EU objectively and detailedly. On that basis, we make contrast between the status and features of the import and export of China and EU’s original15countries and newly joined12countries. We find that:EU’s original15countries’FDI mainly focuses on manufacturing industry, and the investment in manufacturing industry concentrates on key industries such as capital-intensive industry, the high-tech industry, automobile industry, pharmaceutical and medical device manufacturing industry, electronics and communication manufacturing industry, which are the pillars of the economical development of China. EU’s joint connection of equipment investment and technology export in these industries has become one important source of visual plants and advanced technology of China. Eu’s investment in China has optimized China’s structure of import and export. Due to the difference in economic development and industrial structure, it’s obvious that there are complementarities between China’s and EU’s trade structure. Previously, China’s export to major EU countries mainly focuses on low value-added textile and electrical products such as textile and apparel, shoes, bags, toys, plastic products, coke, tools and steel, and China imports mainly capital goods and high-tech products from these countries with Industrial raw materials, transportation equipment, steel, wheat, primary plastic and medicine ranking second. In recent years, trade of high-tech products is gaining rapid development. Products exported are now gradually converting from low-tech goods and middle low technology products to middle high technology goods and high-tech products, and products imported are still mostly high-tech products and middle high technology goods. EU’s average FDI is well beyond that of Asian countries/areas. EU countries tend to invest in technology-intensive and capital-intensive industries. Therefore, EU countries’ investment will increase China’s domestic capital and bring advanced technology and management experience to China by means of technology transfer and spillovers at the same time, which can improve the production efficiency of local enterprises, promote the upgrade of technology-intensive and capital-intensive industries and accelerate the enterprise transformation in China.In the second part, we study the mechanism of the influence of FDI on the host country’s export commodity structure and have done some empirical research, referring to relevant theory. In this paper, we base on the Dornbush, Fischer and Samuelson (1980) model (DFS model) and have made further expansion. The main difference between the econometric model of this paper and the DFS model is that: the model in this paper is based on the DFS and discusses about the influence of FDI on the import and export structure of the host country and the impact of technology import on host country’s import and export structure respectively. Finally, we compare the difference between the influence of foreign investment and the introduction of technology on the host country’s export structure. Because the statistics study in the third paragraph shows that:The main characteristics of the EU’s direct investment in China’s is that FDI drives the input of advanced technology. That is to say, the introduction of the EU’s direct investment in China has caused the introduction of advanced technology simultaneously. In particular, EU’s original15countries’FDI in China mainly focuses on middle and high technology and they tend to invest in technology-intensive and capital-intensive industries. Therefore, we FDI and carry on variable analysis of FDI and technology progress and construct the theoretical model on change of the FDI and host country’s export trade, based on the reference in the previous research of scholars. Under the condition of opening, we have studied the general influence of FDI on a country’s export structure in two kinds of situations. The first analyzes the impact of the introduction of foreign capital on domestic elements structure, unit cost, comparative advantage and export structure. Its basic conclusion is that:after the introduction of foreign capital, the comparative ratio between labor and capital decreases, relative wages of labor rise, and the cost of capital (interest rate) drops, which results in the country’s reduction of the production scale on these labor-intensive products and getting comparative advantage on the production of these goods. This causes the increase of the kind of domestic superior products and the decrease of foreign superior products. The decrease of foreign superior goods kind may stimulate their research and development of new technology and put it into production area. Therefore, this paper analyzes the second case:foreign country uses new technology in the host country’s production. This case and can be subdivided into two smaller parts, the host country has not acquired new technology and has got two kinds of new technology. And the final conclusion is that:the impact of introduce advanced technology to utilize capital is more obvious than that of simply introduce investment on a country’s (mostly developing countries) import and export structure. In other words, the quality of capital introduction is more important than the quantity. What shapes a country’s export structure is not the quantity of, but the quality of foreign capital introduction. Because the data of the newly joined EU countries’direct investment is limited, the empirical part of this paper only considers the original15countries and the relation of its export commodity structure in our country in order to make further validation of the theory. In this paper, we use the statistics of2001-2011and select the amount of products of different technology level that are exported from China to EU as explained variable. The explanatory variables are EU’s FDI to China, China’s GDP, China’s internal cost of R&D and test and EU15countries’total GDP. We have done time series analysis and panel data analysis on the variables above and drawn the conclusion that:EU countries’economic level is a key element to the export of China to EU. Every unit increase of EGDP promotes the export of middle high technology goods most. It shows that with the economydevelopment, EU countries’demand of China’s middle high technology goods is growing. Every unit increase of CGDP causes the export of China’s low-tech products most. That shows that China’s economy growth promotes the low-tech goods most and China still relies on the export of resources and labor-intensive products to some extent. From the overall, the effect of EU on the export of China’s high-tech and middle high technology products is more obvious, but on middle low technology and low-tech products the effect is weaker. Hence, China should maintain the impact of EU’s promoting effect on the export of China’s high-tech and middle high technology products and drive the R&D of high-tech products by middle high technology products, thus improving China’s export structure comprehensively.In the third part, we have studied the mechanism of the influence of FDI on the host country’s import structure and carried on empirical research. There aren’t theoretical models of the impact of FDI on a country’s import structure by scholars at home and abroad, so the difference between this part and the second part is that, this part only studies the general impact of FDI to a country’s import structure from the perspective of qualitative research due to the limit of the authors’research level and ability. With references to the basic idea of Grossman&Helpman、 Coe&Helpman(1995), Barro and Sala-i-Matin(1995), this article mainly elaborates that the impact of FDI to host country’s import structure is uncertain and it’s under the mutual influence of host country’s economy, foreign technology advantages, domestic research and development capabilities, and other elements. Section2in this part draws on the basic idea of Coe&Helpman (1994)(hereinafter referred to as CH model) the basic idea and carries out empirical tests. Because the limitation of the statistics of EU’s newly joined countries’FDI to China, the empirical part only considers the relation of import structure between China original15countries. In this paper, we use the statistics of2001-2011and select the amount of products of different technology level that are imported to China from EU as explained variable. The explanatory variables are EU’s FDI to China, China’s GDP, China’s internal cost of R&D and test and EU15countries’total GDP. We have made time series analysis and panel data analysis of the above variables respectively and panel data and draw to the conclusion that:There’s a long-term equilibrium between EU’s FDI to China and China’s import from EU. What is different to export structure is that, the FDI can inhibit the import of middle high technology products. Considering EU’s FDI to China mainly focuses on manufacturing industry, especially middle high technology products, we can see it as that the development of China’s middle high technology can satisfy domestic demand and and gradually completed the import substitution, hence reducing the demand for import of those products. Empirical study also shows that the impact of EU’s FDI to different kinds of products of our country. For the overall, it is weaker than the impact on export commodities, but it ranks the same:high-tech products(7countries), middle high technology products(5countries),middle low technology products(4countries),low technology products(1country). This shows that EU’s FDI in China also influences the import of middle high technology products more and can improve the import structure of China. At last, according to the research content, Summed up the research conclusion and give some Suggestions. |
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