The Analysis Of Affection On China Foreign Trade From Foreign Direct Investment

With the reform and open to the outside world, Chinese economic and trade have quickly developed, now the formation of opening economic is taking. The precedence of China in international trade has continuous raised. Its influence on the world economic and trade is raising too. However, to a great extent, the quickly growth of Chinese foreign trade is propelled by the import and export of those foreign-investment enterprises. Now foreign-investment enterprise has become the main component of Chinese foreign trade, their quantity of trade has exceeded half of China. It can be said that if we do not research FDI, we will not study the foreign trade of China completely. So, it is necessary to research the import and export of foreign-investment enterprise.Foreign-investment enterprises affect the foreign trade of China in many respects: such as the scale of trade, the structure of commodity, the way of trade and the terms of trade etc. In order to learn how FDI affects foreign trade of China, we could observe the above respects.As the respect of total scale, it usually shows on the component part. From the year 2001, foreign-investment enterprises' import and export has occupied more than a half in the whole Chinese trade, and its increase seems progressively. Through quantitative analysis, we find there is a positive related between the amount of FDI and the number of Chinese trade. At the same time, foreign-investment enterprises' import and export has promoted the structure of commodity of our country. Especially electromechanical equipment and advanced technologically equipment. Foreign-investment enterprises give an impetus to the development of these two industries in China extremely. The calculation of RCA proves that the RCA index of foreign-investment enterprises is much better than that of government-owned corporation.With the entrance of foreign-investment enterprises, processing trade has quickly developed in China. Why foreign-investment enterprises prefer processing trade? The reason is based on their global strategy. Under the integration of trade and investment, multinational corporations take advantage of China's great quantity and low-priced labour force. MNCs move their links of assembling and processing to China extensively to gain low additional price. Thus, MNCs transfer the Chinese labour force comparative advantage to their competitive advantage.Foreign-investment enterprises affect China's terms of trade through affecting our country's import and export price. Especially MNCs' tactics of transfer price. In order to reduce tax, transfer capital and profit, MNCs always import intermediate products and raw materials with high price, and export manufacture products with low price. In this way, MNCs can make their global profit maximum, and worsen China's terms of trade.In order to use foreign investment more effective, China government should pay attention to the coordinate of introduction of foreign investment and macro-economic target. Weaken the target of remedying capital, strengthen the target of introduction of technology and the manager experience. Combining the introduction of foreign investment, promotion of the industrial structure with the competition of foreign trade . Improve and perfect the socialist economic system, improve the investment environment, raise the standard and quality of utilizing foreign investment.