A Study On The Effect Of China's Outward Foreign Direct Investment In Africa On Trade

In recent years, with the implementation of the strategy"going out", China's outward foreign direct investment in Africa grows rapidly. At the same time, economic and trade cooperation between China and Africa is going continuously strengthened. Generally speaking, outward foreign direct investment will either promote or replace international trade. In light of this fact, this thesis takes the 33 African countries as the sample to research the effect of China's outward foreign direct investment in Africa on trade. On this basis, the thesis aims to probe into ways of coordinating policies on the investment and those on trade with Africa so as to make better use of direct investment on Africa to promote bilateral trade.This thesis conducts the research on effect of China's outward foreign direct investment in Africa on trade, following the thought-pattern of theoretical analysis, current state description, empirical analysis and countermeasure presentation. Firstly, an analysis are made on the economic origin of the three different effects caused by international direct investment and on those factors influencing the three effects. Generally speaking, there are three effects on trade caused by international direct investment: one being alternative relations and the other complementary relations, another being integration relations. Besides, trade relations can be influenced by investment motivation as well as investment type,and a classification is made on the specific demonstrations of effect of international direct investment on trade. Then the thesis analyzes the current state of China's outward foreign direct investment and trade. In recent years, both China's outward foreign direct investment in Africa and their bilateral trade have developed on a great scale. On the previous elaboration, the thesis conducts qualitative research on effect of China's outward foreign direct investment in Africa on trade. Regarding the empirical analysis, Panel Data Model is adopted to analyze the effect of China's outward foreign direct investment in Africa on Import and Export Trade. The result shows that China's outward foreign direct investment in Africa promoted the bilateral trade. That's because China mainly invest in resource exploitation and manufacturing, which generally promote the bilateral trade significantly. The result also shows that the effect on trade affected by outward foreign direct investment varies among different countries. Finally, some policy measures are proposed based on the theoretical analysis and the result of empirical analysis for reference so as to promote the development of China's cooperation with Africa in investment and trade area.