The Impact On The Volume And Structure Of Japan And China OFDI By Currency Trend Appreciation

Outward foreign direct investment is an objective economic phenomenon under the commodity economy. It meets the requirements for the cross-boarder development of the productive forces. In the context of word economic integration, the OFDI is becoming a powerful tool of participating in the international competition .All countries are trying to gain the international interest that beyond their own country from the OFDI. China's OFDI started after the reform and opening up. It has been made even more development after 2001 when China joined in the Word Trade Organization.There are many factors that influence the OFDI .Today, the exchange rate attracts people's attention. This is because China reformed the exchange rate system in 2005, and started the process of currency trend appreciation. China has long been the currency appreciation pressure .In 2005, the reform of the exchange rate system made the RMB to appreciate two percent, and then continues to appreciate. Despite the exchange rate fluctuated after the reform, there is a large space in which the currency can appreciate. The paper studies the effects that currency appreciation to OFDI's volume and structure based on Japan and China, and then analyzes the similarities and differences between the two countries. All of these analyses are to provide reference for the China's OFDI.The results of the paper shows that the appreciation of exchange rate have promoted the growth of total OFDI, but the impact on the sector's OFDI is different. This difference plays an important role in adjusting the source country's industrial structure. Based on the above conclusions, this paper points out: China should take advantage of the opportunity of the currency appreciation to improve the OFDI, and upgrade the domestic industrial structure.