Foreign Direct Investment In China's Export Trade Impact Mechanism

Since China adopted reform and openning-up policy in 1980s,foreign direct investment(FDI) flows into china at a fast speed,together with the expand of China's export volume and the change of export structure.Is there a special link between these two phenomena ?this paper aims to analysis their relationship.Firstly from theoretical point of view,this paper reasons the causal link between inward FDI and China's export expand for the following facts: China is burdened with'capital-gap'and 'tech-gap'for her weak infrastructure,large population,low technology level,etc.,but her cheap labor,ever-improved FDI policy attracts FDI to flow in,which in turn,makes up those two gaps and provide power for economic development and export.By a microeconomic model,the rationality for FDI to produce in China and export to other countries is justified.Then the paper analyzes the affecting machanism of FDI on export from favorable and unfavorable aspects.After studying the foreign invested enterprises(FIEs)'s export behavior,the fourth part examines the FDI' s effects on export volume and competing-power through a set of logarithm models.On the basis of economic linkage and statistical availability,relevant variables are selected into the models.The regression results tell that inward FDI does act as stimulators to the total export value,but its effect on export competing-power and promoting China's real technology power is weak.Conclusion and suggestion comes in the last part:FDI does help the export expand but the linkage between FDI enterprises and local firms is so weak that China gains little export benefit.To get the maximum advantage from FDI,some measures must be adopted,such as improving the competence of domestic firms,adjusting tax policy, strengthening the supervision of FDI enterprises,etc..