The Study Of The Relationship Between European Union Direct Investment In China And China's Export Structure To European Union

European Union (EU) is one of the most important foreign direct investment origin countries and trading partners of China.As E.U direct investment in China and Sino-EU trade has been growing rapidly, the export commodity structure from China to EU has been optimizing constantly. In 2001,among the manufactured products which export to EU, the ratio of the capital-technology-intensive products export value preponderated over the export of labor-intensive products.In the other hand, the industry structure of FDI from EU has becoming high-class increasing, FDI has focus on the industries of capital-technology-intensive that is so much needed in the development of China's economy, for example, automotive, medicine and medical equipment industry,machinery and so on. Then, does FDI from EU improving the export structure of China to EU? If it does, which ways to achieve the optimization?The article discusses the two aspects mentioned above and proposes polity recommendations based on the conclusions of the empirical analysis. The paper firstly expounds the theoretic basis of the relationship between E.U direct investment in China and export commodity structure of China to EU. Then the paper studies the structural characteristic of E.U. direct investment in China and characteristic of export commodity structure of China to E.U. according to a large number of data ,it is found that there exists correlation between these two items.Secondly, the paper analyzes the relationship between E.U direct investment in China and the export commodity structure of China to E.U by means of Johansen Cointegration Test and Error Correction Model and it is found that there exists correlation between these two items in the long term. E.U's FDI promoted exports products'structural optimization in a certain extent.E.U's FDI and the increasing of capital-intensive exports proportion has a positive correlation with a negatively correlated between the primary products and labor-intensive exports.The promotion effect on changes in the proportion of high-tech -intensive exports is greater than that of medium-technology-intensive products. Through analyzing the relationship between FDI from E.U. and the export structure of manufactures from China to E.U in the specifical countries in E.U, we found that: the FDI export promotion effect on the impact of high-technology-intensive from Netherland, Germany and Great Britain is the largest, other member countries that are not the main investment countries have a larger effect on primary export products.Thirdly, the article also analyzes the impact path of the effect of EU's FDI on the structure of export products and it is found that FDI from E.U. plays an indirect role in promoting the export structure optimization through technology spillover and capital accumulation . Through empirical analysis, we found that the impact of elements structure changes to optimize the structure of export upgrading is less than that of technological progress.Finally, the paper analyzes the conclusions of the empirical research above and raises some corresponding suggestions: make good use of the E.U. and the complementary nature of our domestic industry to develop our own pillar industries; emphasis on FDI from those member that is not the main investment countries; through police guidance to enable domestic enterprises to strengthen cooperation with E.U. enterprises in China in backward linkages.