The Study Of Effect Of Germany Direct Investment In China On Bilateral Trade Volume

Since China’s reform and opening up, Germany’s direct investment to China hasincreased rapidly. Germany’s direct investing projects to China have reached$625million up to2012, while the trade volume between the two countries have reached$161.13billion. At present, Germany is China’s largest trading partner in Europe, as wellas the largest investor to China in EU countries. The development of the trading relationbetween them has great effects on development of Chinese economy and protection oftrading relations between China and Europe, especially in the background of unstablerelationship between both sides. This article studies the relationship between the directinvestment from Germany to China and China’s import and export trade, which could bea guidance to China-Germany trading relationship.In this article, the author systematically sorts out the documents researching therelationship between investment and trading by domestic and foreign scholars, especiallythose studying the direct investment from Germany to China, and the bilateral tradebetween the two countries. After a detailed study about history, status, size and featuresof the direct investment from Germany to China, and the bilateral trade between the twocountries, the article uses an econometrics model system to comprehensively study therelationship between the direct investment to China and China’s in-and-export trade,instead of only roughly comparing every year’s investment data to china with the dataabout China-Germany trade. This fills the gap of this field. Finally, a solution accordingto the present trading situation between the two countries is given out.