Study On The Correlativity Between Foreign Direct Investment And Import & Export Trade

Opening policy is the inevitable requirement for the economic construction to adopt to the trend of economic globalization. It involves a close association between our country and the world in capital,technology,labor resources,managerial experience,etc. Under the tactics of"bring in"and"go global",China have been both attracting,ultilizing overseas's direct investments and encouraging the local territory enterprise investing abroad as well as multinational operation. We have fully made use of both Chinese and foreign markets and resources, and bring out the best in each other.The foreign trade and ultilizing foreign direct investments is two major component part of our opening policy. The domestic situation indicates that our country has achived great success in making use of foreign direct investment and foreign trade since 1978. China have been the No.1 of absorbing foreign direct investment in the world. In 2006,atual foreign direct investment increases 5% compared to 2005. Total value of the whole nation import and export is 17606.9 billion U.S. dollar, increases by 23.8% compared with the same period of the last year. Export value is 9690.8 billion U.S. dollar,and import value is 7916.1 billion U.S. dollar. Active balance is up to 1774.7 billion U.S. dollar.The international situation indicates that the world economy ties up with the development of international division of labour and commodity exchange. Economic globalization is an inevitable trend with a vivid characteristic of international trade and FDI's development. Foreign direct investment effect the host country's economy in many ways. It can not only stimulating economic growth from industrial set-ups,trade,technique progress,but also able to resolve problem such as employment,tax revenue. This thesis mainly studies on the correlativity between foreign direct investment and import & export trade.Nowaday,the inflows of foreign capital is very ample. However,have these capitals played positive role in the improvement of import & export and trade structure? This thesis ultilize the method combined qualitative analysis and quantitative analysis, discussed the impact of foreign direct investment over the foreign trade from four aspects,and come to the conclusion:(1)the relation between foreign direct investment and import trade:long term equilibrium does not exist,that is,the increace of foreign direct investment has no relation with the increace of import trade.(2)the relation between foreign direct investment and export trade:long term equilibrium does exist,that is,the is a long-range and steady correlation between the two.(3)the relation between foreign direct investment and import structure: foreign direct investment does not act direcly to import strctrure.(4)the relation between foreign direct investment and export structure: foreign direct investment can promotes the export of manufactured goods and the electromechanical,hi-tec products.Since that,the strctrure of export trade have been step-up.The countermeasures and suggestion on how to ultilizing FDI to promote the foreing trade have been discussed also.