The Analysis On Trade Effects Of China's Outward Foreign Direct Investment

China's Outward Foreign Direct Investment (OFDI) has become the point of issue in the world in recent years. With the development of China's economy and the support of Chinese government, the OFDI of Chinese companies is increasing rapidly. However, China's OFDI is still weak compared to the developed countries because it happened late. Therefore, systematic study must be done to enhance the positive effect of China's OFDI on export and import of China.This study analyzes the effect of China's OFDI in both theoriotical and empirical ways.Based on many scholars'researches, this study puts forward the features of China's OFDI, analyzes the influence of OFDI on China's international trade, and tests the relation between OFDI and international trade based on Panel VAR Model.The final result of the empirical test shows that China's OFDI has advanced the export of China.But when it comes to import, there is no notable relation between OFDI and import. Finally, some useful suggestions are offered in the last part of this article about OFDI and trade of China.Presently, the world's economy is still influenced by the ecomomic crisis's aftereffect.But on the other side, the present situation provides chances for Chinese companies to invest in foreign countries. We need to clear the effect of OFDI on import and export of China, adjust motivation and mode of OFDI, enhance China OFDI's efficiency to resolve problems of China's export. Facing the rigorous economic environment, China need to exert its strongpoint, conquer the difficulties of export and grasp chances to make foreign direct investment properly. According to the study, in order to make economy develop steadily and make the export have a good growth, we need to establish concerted trade policy and OFDI policy, grasp every chance and overcome difficulties to develop China's OFDI.