Fdi And Exports, Economic Growth, The Relationship Between

China has been playing an important role in the world economy after its reforming and opening-up. In 2002,China surpassed the United States and became the world's No.1 to attract foreign direct investment (FDI). Its total exports value in 2007 reached 1.218 trillion U.S. dollars, which exceeded that of the United States, and was second only to Germany as the second largest exporting country. The same year, China has become the world's third largest economy body by virtue of 24.6619 trillion yuan in its total GDP, which preponderated over that of Germany. How much does FDI promote China's economy and exports? Is GDP and export growth conducive to attracting more FDI? These issues have been a hot topic of research in recent years. Located in the Yangtze River Delta, Zhejiang Province plays a vital role in China's open-up policy in the use of foreign capital each year, total exports and total GDP the nation wide. In this paper, a panel data of 10 prefecture-level cities in Zhejiang Province was utilized and through a co-integration analysis, it is confirmed that there is a significant positive effect of FDI on economic growth and the expansion of exports, while GDP has a positive impact on FDI in turn. However, the impact of exports on the effect of FDI is not as obvious as it was thought.