Foreign Direct Investment In China Trade Effects Of Regional Differences

The regional difference of the foreign direct investment's trade effect is one of the most important indicators, which inflects the regional difference of foreign economic development level. The research on this topic has an important significance on the diffenent region attracting foreign direct investment and developing foreign trade.This article elaborates the theory of the effect of the foreign direct investment firstly, and then describes the difference of the foreign direct investment and foreign trade in eastern, central and western region. In the end, this article establishes a regional cross section units, including eastern region, central region and western region, on base of which this article empirically analysises the regional differences of the foreign direct investment's trade scale effect and the regional differences of the foreign direct investment's trade quality effect (from the structure of the export and import commodities, trade method and trade competitiveness perspective ), using a Panel Data model.The empirical results prove that the trade scale effect and trade quality effect of the foreign direct investment are different in eastern, central and western region. First, the trade scale effect of the foreign direct investment in eastern region is the most significant; the western region is the second most significant; the central region is the third most significant. Second, the optimization strength of the foreign direct investment to the structure of export commodities in the eastern region is the most significant, the western region is the second most significant; the central region is the third most significant. The foreign direct investment has a deterioration effect to the structure of import commodities in eastern region, but the foreign direct investment has a optimizational effect to the structure of import commodities in central and western region. Third, the foreign direct investment in eastern and western region doesn't have a tendency in export and import processing trade at this stage, while the foreign direct investment in central region had a tendency in export and import processing trade. Fourth, the foreign direct investment promotes the trade competitiveness in eastern region, but the foreign direct investment doesn't promote the trade competitiveness in central and western region. In the end, according to the empirical results, this article analysises the reason why the foreign direct investment has a different effect in eastern, central and western region and gives out some targeted policy recommendations to the eastern,central and western region about how to attract foreign direct investment and develop foreign trade.