A Study Of Surplus Effect Issue That FDI On China-US’s And China-EU’s Trade

As mainland China’s opening up deepening, the scale of absorption foreign capital is growing rapidly and the trade surplus of mainland China is also growing rapidly by the inflow of large amount of foreign capital. With the trade surplus continue to expand, the anti-dumping and anti-subsidy is common occurrence in mainland China’s foreign trade and the RMB is also facing greater external upward pressure. In this context, there has strong theoretical value and practical significance to put FDI and trade balance of trade in the same analysis framework, to study what kind of impact and extent the FDI on mainland China’s trade imbalance, and what kind of trade effect that different types of foreign capital by country (region) has on mainland China’s trade surplus.This article mainly from the international direct investment theory as well as FDI and trade balance theory to discuss mainland China’s foreign trade surplus issue, the first source of mainland China’s trade surplus is the United States, followed by European Union, so the paper will mainly discuss the trade surplus problems of mainland China and the United States as well as mainland China and the European Union. The existing research about FDI and China-EU’s trade surplus is little, while on the analysis of the relation between FDI and China-U.S trade surplus, the paper also analysis China to the United States trade surplus. The existing research just general introduces the relation between FDI and mainland China’s external trade surplus, research about the types of foreign capital by country (region) that lead to mainland China’s external trade surplus, and what trade effect that caused by different types of foreign capital by country (region) is very little. While the paper will have a detail analysis about the types of foreign capital by country (region) that influence mainland China to the United States and to the European Union trade surplus,and what trade effect that different types of foreign capital by country (region) to the United States and to the European Union trade surplus.The structure and main content of the paper is as follows:The first part mainly introduce the basis of selected topic, objective and significance, method and content of the research as well as possible innovation and shortage. The second part mainly expound the paper’s theoretical basis, definition the relate concept of the paper as well as from two angle to review literature about FDI location selection, FDI and trade balance’s relation. The third part analysis mainland China’s current situation of external trade and FDI, mainly from the current situation of mainland China’s external trade, FDI and the form of mainland China’s external trade surplus to discuss. The fourth part mainly analysis FDI and the trade surplus of mainland China. Firstly, analysis the relation between FDI and mainland China’s external trade surplus; Secondly, analysis the main foreign capital type by country (region) that influence China to the United States and to the European Union’s trade surplus.The fifth part mainly analysis what kind of trade effect that influence China to the United States and to the European Union’s trade surplus, which caused by different type of foreign capital. The sixth part is the conclusion and policy suggestions of the paper.The main conclusion of the paper is as follows:Foreign direct investment flow and stock influence mainland China’s foreign trade surplus significantly, and the foreign direct investment flow and stock that mainland China absorbed is the granger reason for mainland China’s external trade surplus. The foreign capital type by country (region) that influence China to the United States and China to the European Union’s trade surplus is different, the foreign capital type by country (region) that influence China to the United States trade surplus is from Japan and South Korea, Hong Kong, Macau and Taiwan as well as the United States, while the foreign capital type by country (region) that influence China to the European Union’s trade surplus is from Japan and South Korea and EU. The United States, Japan, South Korea and Taiwan as well as Hong Kong and Macau are respectively by means of the trade effect of complement, surplus transfer and export promotion to influence China to the United States trade surplus. Japan and South Korea are through the trade effect of surplus transfer, and EU is through the trade effect of complement and substitution to influence mainland China to the European Union’s trade surplus. At last, the paper puts forward policy suggestions from adjust strategy to introduce foreign capital, develop outward direct investment, make a difference of different types of foreign capital, combine trade policy and foreign capital policy effectively as well as guide the foreign capital flow reasonably.