China Analysis Of ASEAN Trade Effects Of FDI

International direct investment and international trade are not only two basicforms of international division of labor, but also two kinds of international economicactivities. Along with the advancement of economic globalization and regionaleconomic integration, the position and role of international direct investment ininternational communication has become increasingly prominent, and even have farmore than international trade. Around the world, both in developed countries anddeveloping countries are actively involved in foreign direct investment. In the wake offurther growth of China’s economic power, our foreign direct investment also revealeda trend of fast increase. The establishment of China–ASEAN Free Trade Area, made itthe biggest regional economic integration organizations in the developing country, andfrom2004to2013, China–ASEAN EXPO has held successfully, making the aseanregional economic obtained rapid development. The ASEAN region has been one ofthe important destinations of foreign direct investment in China. In recent years,China’s direct investment to ASEAN region has grown rapidly, and investment projectalso presents the trend of diversification.The traditional research on the effect of foreign direct investment and trade, fromthe foreign point of view, were mainly between developed countries and developedcountries to developing countries, considering that foreign direct investment and tradehave three kinds of relations: alternative，complementary and uncertainty. From theperspective of domestic, on the one hand, because our economic and trade policy paymore attention to the "bringing in" and less emphasis on "going out"; on the otherhand, our country is the developing country that attracts the most foreign directinvestment, and foreign direct investment of our country starts relatively late,development time is shorter, which makes the research on foreign direct investment toChina’s import and export scale. The research about China’s foreign direct investmentto China’s import and export trade is less, a small number of studies have focused onChina’s foreign direct investment motivation, competitive advantage, location selection, investment mode, etc. This article from the perspective of developingcountries, choose the ten ASEAN countries as the object, and research the trade effectof China’s direct investment to ASEAN regional trade effect.First of all, introduce the existing foreign direct investment and trade effecttheory from the view of static state and dynamic state. From the static perspective,this paper introduces the alternative trade theory of Mundell and the complementarytheory of Kojima; From the dynamic state, this paper introduces the Vernon’s productlife cycle theory and dunning’s theory of international production compromise. On thebasis of theoretical analysis, analyze present situation and existing problems ofChina’s direct investment and trade to ASEAN. China’s direct investment presentsituation to ASEAN are as follows: the level of direct investment was relatively low,total direct investment grew rapidly and direct investment areas gradually broadened,the main problems were: direct investment industrial structure unreasonable,investment country distribution imbalance, investment economic environmentimperfect; China’s import and export trade to ASEAN as follows: the scale of tradegrew rapidly, trade status increasing and the trade structure optimization step by step,but also exist the economic competition fierce because the larger proportion ofbilateral intra-industry trade.Then based on panel data, establish the gravity model and use metrologicalanalysis method and analyze the import and export trade effect of China’s2003-2012direct investment to ASESN countries from the aspects of the empirical aspects. Itconcluded that China’s direct investment to ASEAN regional trade effect is positive,namely, China’s direct investment to ASEAN regional promotes the growth of importand export trade. But due to the ASEAN economic development is imbalance, thetrade effect of direct investment differ by county: trade effect is more significant inSingapore, Brunei and Malaysia; while the trade effect of direct investment isrelatively weak in Laos, Cambodia and so on.Finally, make the targeted suggestions to direct investment to ASEAN from themacro, meso and micro level: give full play to the functions of the government at themacro level; adjust the industrial structure at meso level; promote the competitiveness of the enterprise at micro level. Government, industries and enterprises jointlypromote China’s direct investment to ASEAN region for the purpose of promoting thedevelopment of import and export trade.