The Impact Of EU’s FDI In China On The Scale Of SINO-EU Trade

The EU is China’s largest trading partner and an important source of FDI in China,properly handling the bilateral economic relation is vital to China’s economic development.This research studies the SINO-EU economic relation from the angle of investment andtrade, trying to find a policy breakthrough on balancing EU’s FDI in China and bilateraltrade to achieve a win-win situation.This paper combines the methods of history and reality review, theory and practicalanalysis, qualitative found and quantitaive test. Firstly, this paper analyzes the trade effectof EU’s FDI in China by reviewing the present situation of the EU’s FDI in China andSINO-EU trade, finding that the growth of EU’s FDI in China can promote the increase ofSINO-EU trade volume, China’s exports to the EU, China’s imports from the EU andChina’s trade surplus to the EU. Secondly, this paper uses empirical test like Cointegrationand Granger to analyse how the EU’s FDI in China influence the scale of bilateral tradeand calculate the size of this influence. Then the paper comes to the conclusion that theEU’s FDI in China and the scale of bilateral trade has a complementary relationship, andemphasizes that we should take advantage of this relationship when making SINO-EUinvestment and trade policies. At last, the paper put forward some proposals based on theresearch results from the macro, meso and micro angle to achieve a long-term developmentof SINO-EU investment and trade.