The Research On The Overseas Direct Investment Promoting The Development Of Foreign Trade In China

With the development of globalization, technological advancement and the deepening of international division of labor, countries enlarged foreign investment. Since the reform and opening up of china, our country has attracted foreign direct investment and developed foreign trade, at the same time started overseas direct investment. Long-term of extensive development mode is not conducive to the sustainable development of our country, also not conducive to the sustainable development of foreign trade. The overseas direct investment has a range of positive effects on foreign trade; to a certain extent, promote the healthy development of foreign trade. This article started from the relationship between foreign direct investment and foreign trade, reviewed and summarized relevant research at home and abroad and then reviewed the classical theory of foreign direct investment. Based on the reality and pointed out the necessity of developing overseas direct investment in china and the urgency of long-term development of foreign trade of foreign, and proposed three indicators on the development of foreign trade by feasibility, such as foreign trade gross index, commodity structure index and technical index; According to the relevant theory, elaborated the mechanism of foreign direct investment promoting the development of foreign trade, overseas direct investment through effects of scale and composition to promote the development of foreign trade directly; overseas direct investment through the effect of technique to promote the sustainable development of foreign trade indirectly from the macroscopic level. After analyzing the status of foreign direct investment and foreign trade deeply, used time-series data of overseas direct investment, foreign trade, TFP and so on, from 1985 to 2008, by the cointegration analysis, error correction model and multiple linear regression model, study the impact china’s overseas direct investment on the development of foreign trade by empirical analysis. Firstly studied long-run equilibrium relationship between foreign direct investment and exports, imports and the structure of exports respectively by the cointegration analysis; then discussed reverse technology spillover effect of foreign direct investment by the modified C-H model. Through the mechanism analysis and empirical test process, the results showed that foreign direct investment and foreign trade would be complementary in the long term; would optimize the structure of export commodities in the long term and facilitate the foreign technical progress from three aspects which are the scale effect, structure effect and technological effect.