The Analysis Of Interaction About FDI And Foreign Trade

As two essential parts of the open economy, foreign trade and international direct investment are the driving force of a nation' economic development in modern times. With the scale of absorbing foreign investment been broadened, as well as the rapid and stable increase of foreign trade and foreign investment in China and in Jiangsu, foreign trade, external investment as well as foreign investment absorption have become important approaches for China as well as Jiangsu to realize their further economic development. How can we better attract and make use of foreign investment, as well as accelerate external investment to make an interactive coordination between international direct investment and foreign trade, is a key issue determining the successful and rapid economic development in Jiangsu or even in China.Jiangsu province plays an important role in FDI and foreign trade as a developed province located in Yangtze River Delta. Jiangsu is the deputy of open economy. FDI and foreign trade have become two engines of development. This paper starts from the classical theory of trade-investment integration and the analysis of the substitute model and the mutually complementary model of trade and investment, and proceeds to illustrate the influence of investment trade effect. This paper researches the relationship between trade and FDI by the method of metrology. This paper concludes economic data about Jiangsu of recent years firstly. Analyze the traits and path about interaction of FDI and foreign trade. Secondly, this paper apply multiple regression model and Granger causality test studying in the interaction between FDI and foreign trade, especially notice the difference among sunan, suzhong and subei. Then it goes on with the research of two industries'details including manufacturing and the third industry. The research shows that Jiangsu Province's foreign trade and FDI are the two complement of each other, showing a high degree of complementarities. In minor extent, there is a trend of alternative. Complementary and alternative should be the relationship of coexistence, mutual relations are the main. In the base of the research of all above, there are some suggestions aiming at the using of Jiangsu's trade and FDI.