The Trade Effects Of Foreign Direct Investment

After China has implementing"the opening"economic development strategy, the FDI and the foreign trade maintained the high rate of rising. In general, FDI and trade exists the mutual promotion relationship, but specifically, FDI in China Eastern, central and western regions have what affected in trade? For this problem from the angle of theoretical and empirical analysis, it has important realistic meaning to further expand the opening of FDI in China Eastern, central and western regions, it is also the content which is studied in this paper.On FDI and trade relationship theory mainly divided into three types: represented by Mundell model of FDI replacing trade, the representative Qing model of FDI promoting the trade, the representative Pat Rhett international direct investment theory of FDI and trade relations with complementary and alternative coexisting. The research on the reason of differences in theoretical FDI and trade relations is the research content.In order to examine the relations FDI and trade, China is divided into the eastern, central and western regions, according to the data of 1992-2007, through the establishment of the panel data ,it found that FDI has promoted import and export in the eastern region, but create effect more apparent, while in central and western areas FDI also promote import and export, but contribute to the import and export of FDI ,east is greater than central and western areas.On the basis of the empirical analysis ,it has some policy suggestions, specifically including: actively formulate attract foreign direct investment, the pursuit of new ideas to quality-benefit type, actively guiding China to key industries and areas, optimize the utilization of foreign capital of the industrial structure, strengthening domestic industry, play a direct foreign investment enterprise technology spillover effects of industry and attract FDI into service, speed up domestic economic system reform of foreign trade system, especially in the middle and west, promoting the development of the processing trade.