The Impact Of FDI On The Price Terms Of Trade

China's foreign direct investment (FDI) has been increasing in each scale year by year, which contributes significantly to economic growth. It is precisely because of this positive image that led to people's thinking of the policy and effect of investment attraction. This article regards FDI-enterprises as the main role in foreign trade, and analyzes a series of trade effect by FDI.This paper studies the influence of FDI on the price terms of trade, as well as the negative effect of foreign trade, comes to an conclusion that the price terms of trade index falls with the downturn of the export commodity price index in resent years. By time series analysis a significant correlation exists between FDI and price terms of trade: the inflows of FDI bring about the decline of price terms of trade index to some extent,then increase the danger of Immiserizing Growth. The above studies are carried out based on the industrial structure which plays a role of nexus as an important intermediary. The another path to this article explores between FDI and the industrial structure and the empirical results show that FDI inflows greater proportion of the secondary industry, which is worth considering from the long-term perspective of China's industrial restructure ,because FDI-inflows incline too much to certain industries.In order to study the mechanisms between the inner relationships of the two research paths, we make the use of the modern econometric methods and building model, and select related indicator of FDI, terms of trade as well as industrial structure as variables. A conclusion has eventually been drawn by Time series regression analysis: variables the above are correlated among the three as well as the causal relationship verified by Granger causality test; the Cointegration also shows that there is a stable long-run equilibrium. In view of the all above, we put forward the corresponding reasonable and effective countermeasures for current and the future.