The Research On Trade Effects Of China’s Outward Foreign Direct Investment

In China,problems like the recession of demographic dividend,the rise of production cost,the consumption of resources and the deterioration of environment,Domestic competition is increasingly fierce.Combined with the financial crisis in 2008,it slow down China’s trade growth and economic growth,challenged China’s economic sustainable development which rely on the import and export.But on the other hand,China has actively implement the strategy of "going out",it has made significant achievements.As the proposing and implementing of One Belt and One Road,and the speeding-up of external policy,In the future,China’s outward foreign investment will increase continuously,but also some problems such as unreasonable investment structure still exist.Link of foreign trade and outward foreign direct investment,outward foreign direct investment and import and export have extensive relations,that is to say,outward foreign investment may be directly or indirectly to drive the change of trade leading to changes in the economy.In consequence,this article discusses the influence of China’s outward foreign investment on import and export from the theoretical and empirical aspects.At the same time,it analyses the structure of outward foreign direct investment adjustment problems,the concrete content is as follows.Firstly,using nearly a decade of date,it preliminary analyzes the general situation of the development of China’s outward foreign direct investment,the general situation of China’s import and export,the comparison about development tendency between China’s outward foreign direct investment and China’s import and export.It also provides some reference for the following theoretical and empirical analyses.It analyses the trade effects of foreign direct investment,it exist export substitution effect,import diversion effect, export causing effect,import causing effect,market expanding effect and trade structure transformation effect.Secondly,this article carries out a panel data analysis,which indicates that China’s FDI has promoted its import and export,with the FDI data and import and export data of China and 20 other countries from 2004 to 2013.The trade effects caused by China’s investment in the developed countries and developing countries are also different.And by using the state space model,the article gives a prediction for the trend of China’s trade effect caused by FDI,which confirms that the investment coefficient on the import and export of fluctuates over time.The article points out that the speed,scale and the structure of foreign direct investment,as well as the enterprise diversion order will also heavily influence the trade effect.It divides the FDI industries of China into three groups according to the technological content,then makes a simple prediction about the trade effect of those three major industries under different transferring speeds and orders.Finally,the article summarizes the theoretical and empirical aspects which it has researched, and puts forward several political suggestions on the basis of the conclusion:paying attention to the foreign direct investment,reasonably arranging investment structure,attaching great importance to the multiple effect caused by investment, clearing the purpose of investment and reducing volatility of the investment,etc.