The Empirical Study On Investment Development Path And Relationship Between Outward Direct Investments With Foreign Trade In China

During the development of world economy, international direct investment plays an important role. With the rapid growth of China, outward direct investment of China is now being concerned.In this thesis, related to different economic policies under different backgrounds, China's outward direct investments since 1979 can be divided into five development stages based on the figures of overseas companies and outward investments. And it presents the characteristics of every development stage. Especially, the thesis gives a new exposition about China's outward direct investments in 2005 and considers this year as a new beginning point of China's outward direct investment due to the amount of investment in 2005 which brings forward a breakthrough up to one hundred million at the first time.Then it systematically analyzes the regional and industrial distributions of China's outward direct investments, pointing out that the area of China's outward investment are extending and the investments range from the traditional neighborhood countries and regions, for instance Hong Kong and Asian countries, to the developed countries. But outward investment of manufacturing is not the biggest proportion in the industry distribution of China's foreign investments, and it does not increase along with the rise of China's overseas investments, which due to manufacturing's international competition power of China.This thesis shows that the empirical data of China's net outward investment basically corresponds with Investment Development Path Theory of Dunning, IDP theory for short. The u-curve appears in the relationship between China's net outward investment and GDP. According to the theory, the empirical research deduces that China is now in the starting point of the Third Stage of IDP and the outward FDI in China would increase substantially in the future. And the co-integration analysis shows that there is positive correlation between FDI and Chinese economic growth in the long-term.And the thesis analyses the relationship between China's outward investment and international trade by the econometrics method of Augmented Dickey-Fuller unit root test, Johansen co-integration test, vector error correction model and Granger causality test. The evidence suggested that both export and import have the relationship of unilateralist causality with outward investment. Import and export have an influence on the development of China's outward investment and there exist two-degree function of the stably equilibrium.In allusion to the actual situation of the China's outward investment, this essay will also raise the suggested policy and approach for the development of outward investment in two aspects. One is for government: to make the long-run and substantial investment strategy; to expedite the innovation of industry policy; to establish modern corporation institution; to improve the system of investment law; to foster and remodel the confidence of the China's multinational corporation. The other is for China's company: to accelerate the system transformation and management transformation of the overseas companies; to improve products quality; to enhance operator ability; to implement the integrated management.