Economic Development And China's New Trend Of Foreign Trade And Direct Investment

From the perspective of the change of the flow of foreign trade and direct investment, this article analyzed the new trend in China's external trade and direct investment during the later period of 1990's, i.e. shrinking trade surplus and drastically increasing outward FDI. Through the deep research on the relationship between econimic development and flow of foreign trade and direct investment, the author pionted out that this phenomenon is not accidental. It is closely related with the specific stage of China's economic development and external environment, which symbolizes that China's foreign trade and direct investment has entered into a new phase. Based on these efforts, it coped with the economic impact the change might bring about to China while using the methodology of modern economic theory and positivism. The conclusion is that the change in foreign trade and direct investment will not impede Chinese economic devlopemnt. On the contrary, with the function ofrelieving resource and factor shortage, stimulating investment and consumption, phasing out excessive prodution facility and therefore upgrading the industry structure, it will be a driving force for the furtherdevelopment of China's economy. In the last part, referring to the experiences of other countries and the changing world economy and trade environment as well as the transfroming domestic economy and institution, the author forcasted China's trade balance and the development of outward FDI in the forthcoming years.