Study The Influence Of The Export Of China's Foreign Direct Investment

International Trade and Foreign Direct Investment have become two widely concerned topics in the world since1970s, the world trade and foreign investment achieved rapid growth along with the global economic development. As the most prominent country is the global economic growth, China also showed rapid development in the foreign trade and outward direct investment during the recent three decades high economic growth, especially in the last decade after China’s accession to WTO, the development of export has become one of the most important driving force which push china to achieve high growth. The outward foreign direct investment (OFDI) of China is increasingly becoming a public concerned topic under this context. Foreign direct investment has a huge role in promoting China’s further economic development and economic restructuring, the study on the relationship how export affect OFDI is very important to long-term development of the Chinese economy. Current research on the relationship of trade and foreign investment are mostly concentrated on the complementary of substitutive relations between them, but seldom in-depth study on the effect of export to OFDI, even if some literature involved this effect study, they are just treat export as one of the determinants of OFDI then give explanation on it. And further development is needed on the trade impact on OFDI from theoretical perspective.This paper innovatively summarized and presented three theoretical analysis mechanisms of export impact on OFDI to solve the lack of theoretical research situation, they are foreign exchange reserves mechanisms, trade friction mechanism and dynamic comparative advantage transfer mechanism respectively. Then discussed the export impact on OFDI combined with China’s situation, and established the economic model to derive our theory, which solved the problem of lack of theoretical analysis of previous studies in this direction. For empirical research, we use the data of OFDI, export and other variables on58host countries from2006to2010, conduct regression analysis based on panel data model which added the appropriate control variables. The analysis showed a significant positive impact of exports on China’s OFDI, but the impact requires two years conduction cycle. Besides, the other control variables in the empirical results also given some features of the OFDI in China. Finally, based on the results of the theoretical and empirical analysis, China should appropriate relax the control on outward foreign direct investment, maintain the policy of encourage exports but more focus on the optimization of the export commodities structure, and related industrial policies should be developed to support those industry who have been or will be the loss of comparative advantage in the domestic to transferred overseas, in order to facilitate the adjustment and upgrading of domestic industrial structure.