On Interaction Of Foreign Direct Investment And Foreign Trade In Hangzhou

As two essential parts of the open economy, foreign trade and international direct investment are the driving force of a nation' economic development in modern times. With the scale of absorbing foreign investment been broadened, as well as the rapid and stable increase of foreign trade and foreign investment in China and in Hangzhou, foreign trade, external investment as well as foreign investment absorption have become important approaches for China as well as Hangzhou to realize their further economic development. How can we better attract and make use of foreign investment, as well as accelerate external investment to make an interactive coordination between international direct investment and foreign trade, is a key issue determining the successful and rapid economic development in Hangzhou or even in China.This paper starts from the classical theory of trade-investment integration and the analysis of the substitute model and the mutually complementary model of trade and investment, and proceeds to illustrate the influence of investment trade effect in the real world and some relevant WTO protocols on international direct investment. This paper then analyzes the current situation as well as main features and problems of international direct investment (including foreign investment absorption and external investment) and foreign trade in Hangzhou. Based on the real situation in China as well as in Hangzhou, this paper makes a deep analysis of the interactive relationship between international direct investment and external trade in Hangzhou, and finally put forward some strategic suggestions to accelerate international direct investment in Hangzhou.