The Analysis On Different Influences Of FDI On China's Export Trade

FDI is an international economic research topic which has been discussed for a long time in the context of economic globalization. As a major issue, it also has gained a widespread concern of other countries and regions policy makers. China has obtained remarkable achievements in absorption and utilization of FDI since the reformation and opening in the 1970s. There are many empirical studies show that FDI can promote a country or region's export trade growth, but this role will be affected by many factors. The situation the absorption of foreign capital in China displays there is a serious imbalance on the utilization of FDI between eastern region and midwestern regions. The Eastern region and the midwestern regions utilization of FDI accounted for 88.5% and 11.5% respectively in 2008. Besides, the two areas'export level also exists significant differences; the export proportion of eastern region and the central and western regions is 89.79% and 10.21%. The eastern region manufactured good export took up 88.6% of the country's and the eastern region primary products export also accounted for 83.4%. Based on the FDI and regional export trade distribution situation, this paper analyzes FDI's different effect in the two areas.Firstly, in this paper selects 1989-2008 foreign direct investment time-series data of 11 provinces in eastern region and 20 provinces in midwestern region,composed of two groups of dynamic panel data, and made empirical analysis about the relationship between FDI with export scale and export commodity structure. In the analysis of the relationship between export scale and FDI and domestic investment, unit root test, co integration test and granger causality test analysis method are used in this paper. The results showed that the foreign direct investment is the main reason to increase export in eastern region, the effect of domestic investment is lower. While on the contrary, in the Midwest results show domestic investment is the main driving force of export, FDI effect is not significant. On analysis of the correlation of the FDI to export commodity structure, this paper firstly calculate TC index of primary products and manufactured products, the results showed that the trade competitive is much more stronger than midwestern region where still need to optimize export commodity structure. Then made the correlation analysis, the results showed that the foreign direct investment plays an important role in manufactured products export of eastern region, and improves the structure of export commodities trade competitiveness. While the situation in the midwestern exists certain disparity, FDI is the primary driving force to increase the primary products export, but the correlation with the manufactured products is not obvious, therefore the impact of FDI on export commodity structure optimization is not significant.Secondly, due to the difficulties in data, this article only makes qualitative analysis of the factors affect foreign direct investment trade effect. Macroscopically speaking, the most basic and the most critical factors which influences FDI's regional trade differences is FDI concentrated in eastern coastal area, which will produce the corresponding export scale effect and optimize the mix of export commodities.Also analyzed the influence factors of export scale, the difference of region's economic development level and the investment industry is main reasons.The reasons affect the export commodity structure is in different regions the foreign investment's is different, the more similar of development level, the technological overflow effect is better.Finally, according to the analytical results of empirical and influence factors, formulated attracting foreign investment policies of China in different regions. For Eastern region is mainly to enhance the investment structure, and optimize the investment environment. While in the Midwest is mainly to reduce cost and increase investment accumulation effect of foreign capital through improving the investment policy and adjust the-market mechanism, to maximize foreign direct investment trading effect. Maybe it is helpful for promoting China's coordinated development of the economy.