Different Trade Effect Of China’s Out-ward Foreign Direct Investment

With the development of economic globalization, out-ward foreign direct investment (OFDI) of China has been growing. In2010, China’s OFDI reached US$68.81billion, the stock has exceeded US$300million dollars. At present, more than13000subjects invest in178countries and regions in the world. Due to the difference of economic elements、 contact between China and host countries、demand of raw material/intermediate goods and distribution of final goods, trade effects of OFDI in different countries/regions are different. Based on this, this essay research the trade effect difference of China’s OFDI by dividing China’s OFDI area into developed countries, emerging market countries and low-income developing countries. According to the results, we can put forward some suggestions to reduce the trade surplus of China.This paper is structured as follows:The first part mainly describes the research background and significance, and elaborates domestic and foreign research on trade effect of OFDI.The second section introduces the development status of China’s OFDI. On this basis, it analyzes China’s investment position in emerging market countries and developed countries.The third section researches the premise and mechanism of trade effect difference of China’s OFDI.The forth part is an empirical analysis of the impact on trade effect of China’s OFDI to emerging market countries, developed countries and developing countries respectively, through the establishment of dynamic panel data model. By comparing it concludes that China’s OFDI to emerging market countries and developing countries is conducive to reducing China’s trade surplus. On the basis of previous study, the fifth section provides the OFDI countermeasures of reducing China’s trade surplus.