Study On The Trade Effect Of Absorbing FDI From East-Asia In China

This paper mainly studies the trade effect of FDI outputted to China by the top five Asian countries and areas including Japan, Korea, Singapore, Taiwan and Hong Kong. It studies its comprehensive effect to foreign trade of our country and area in a more accurate way and puts forward several absorbing investment policies for relevant department for reference in a more scientific and rational way. Thus, the inflow of foreign capital can exert greater influence on the industrial structure adjustment and the international competitiveness of China.This paper firstly summarizes and analyzes the status of Asian FDI on China and the status of our foreign trade. The result is as following: among these five areas, Hong Kong ranks first of FDI to mainland China. Most of the FDI by these countries and areas are manufacturing industries and the investment location feathers certain difference. In comparison, our trade with these areas especially with Japan, Korea and Taiwan feathers deficit.In order to study the influence of FDI from these five countries and areas more accurately, this paper uses trade gravity model to measure it. The result shows that among these five countries and areas, different country and area exert different influence on our foreign trade. FDI from Japan, Korea and Hong Kong promote the foreign trade of China while FDI from Singapore and Taiwan inhibit our foreign trade.At last, on the basis of the above analysis, this paper puts forward relevant measurement and suggestion to better serve our economy.