Foreign Direct Investment And China's Competitive Advantage-oriented Development Model

Since the beginning of the reform, China has absorbed more and more foreign direct investment. FDI has played an important role in China抯 economic growth and social development. Specifically, FDI has directly effect on the cultivation and development of the competitive advantage of foreign trade of China. It is quite important to study the FDI?effects on China?foreign trade and it is also urgent to study the model of competitive advantage of China. This thesis consists of four chapters and deals with the effects of FDI on developing countries and the strategic analysis of the model of competitive advantage for China. Chapter I mainly illustrates the theoretical linkage between international capital fluid and international trade. International capital fluid and international trade are considered as two key topics in global economic development. Traditional trade theories always pay attention to the function of international trade, while ignoring the influence of capital fluid on trade. In fact the relationship between capital fluid and international trade is synthetic. Chapter II mainly analizes the change of competitive advantage of foreign trade in the process of international capital fluid. Since 90抯, international investment and international lending have expanded rapidly with the incentive of free capital fluid policy. This thesis analyzes the respective change of competitive advantage of developed and developing countries. Chapter Ill deals with the effects of FDI on the trade competitive advantage of developing countries. The fluid of international capital, especially the rapid expansion of multinational corporations is bringing potential advantages and disadvantages. It is more and more important to research these benefits and costs systematically, In chapter IV, the author has given some highlights on the research of FDI抯 effects on China抯 competitive advantage. The thesis illustrates that technological development and massive economy are the main factors for competitive advantage in the process of international trade under the cond Won of capital fluid. Threfore, the author reaches the point that it is urgent to set up the stiategy of competitive advantage in the process of industrialization of China.