Japanese Direct Investment In The Sino-japanese Bilateral Intra-industry Trade Relations

With the development of economic globalization, international direct investment and international trade activities are more closely together. At the same time, Intra-industry trade has also gradually as the main form of international trade。In view of Japan is China's important source of foreign investment and trading partners,This paper attempts to analyze the relationship between Japan's direct investment in China and Sino-Japanese bilateral intra-industry trade, to explore the specific mechanisms that direct investment influence the level and modality of intra-industry trade, and then as the basis for discussing our country's policy options.This thesis first introduce the related theory about international direct investment and intra-industry trade on this basis, On the one hand, this paper analyses the condition of Japan's direct investment in China, from the investment scale, structure, location, methods and motives, and then analyses the economic effect of Japan's direct investment in China. On the other hand, this thesis analyses the development and the economic effect of Sino-Japanese bilateral intra-industry trade, and finds the level of Sino-Japanese bilateral intra-industry trade is rising and mainly concentrated in the area of manufactures, however, mainly vertical intra-industry trade. Sino-Japanese bilateral intra-industry trade increases the welfare effect of producers and consumers, improves the enterprise Technical level, and is also helpful for the emergence of industrial clusters. And then this paper discusses the direct and indirect mechanisms that Japan's direct investment influence the Sino-Japanese bilateral intra-industry trade, and conducts the quantitative analysis which shows a positive correlation between the two. Finally, with the combination of above analysis, this paper puts forward the corresponding policy recommendations.