The Correlation Study Of Foreign Direct Investment In Zhejiang And Zhejiang's Foreign Trade

With the speeding up of economy globalization , foreign direct investment (FDI) becomes the main form of fund flow and the main methods of developing countries gaining foreign funds. Foreign trade and foreign direct investment (FDI) are playing important roles in the economic growth of developing countries.Zhejiang is one of the provinces which economic development plays important role all over the country.The amount of FDI flowing into Zhejiang has been greatly increased after taking reform-open policy, especially after 1990s. Meanwhile, the scale of foreign funds has been enlarged and the composition of foreign trade has been improved in Zhejiang. Then how large effection does foreign funds make to Zhejiang's foreign trade expecially to its export? This paper will take Zhejiang, as an example to analyze the FDI's important effect on Zhejiang's quick economy growth and foreign trade. The combination of the theoretical and empirical analysis has been used.This paper consists of six chapters. Chapter One is the introduction of research theme and research background.Chapter Two sums up the emerging theoretical and empirical studies.Chapter Three summarizes the developing processes of FDI inflow and foreign trade in Zhejiang since early 1980s.Chapter Four and Chapter Five is the empirical study on the relationship between FDI inflow and Zhejiang's foreign trade.Chapter Six try to find out what are the revolution direction of Zhejiang's trade and FDI strategy.The main conclusions are as follows: Firstly, we will study and illustrates the main theory on the mutual influence of FDI and foreign trade. Meanwhile, the whole condition of FDI flowing and foreign trade in Zhejiang will be illustrated; Then we will test the correlation of FDI growth in Zhejiang and the growth of foreign trade there by the method of econometrics with adequate and detailed data. A gravity-like model is used to conduct an empirical study on the relationship between FDI and Zhejiang's trade partners. Finally, we will points out the existing problems on how FDI promotes the foreign trade of Zhejiang and puts forward some effective and practical suggestions.