The Export Structure Adjustment Effect Of Chinese Outward Foreign Direct Investment

In recent years, China’s export and outward foreign direct investment are being more and more important. China’s export has sustained a high growth rate since its entrance into the WTO. In the past years, China’s economy performance was greatly impelled by the amount of export. Compared with export, foreign direct investment in China started later but it has a rocket growth rate in the past few years. "Bringing in" and "Going out" policies are both the key directions of Chinese government. China is gradually losing its comparative advantage in labor-intensive products; in order to keep our advantage in trade, we must pay attention to structural optimization of our commodities. Current literatures focus more on the relation between exports and OFDI. This paper analyzed OFDI’s adjustment effect to trade structure and made empirical analysis.This paper focuses on the measurement of trade structure and the relation between OFDI and trade structure. This paper adopted the value-added model of trade products and calculated the level of China’s export products under the SITC three-digit standard. Then we put forward an empirical model to examine the relationship between OFDI and trade structure. We also examine China’s OFDI to ASEAN and EU to verify the different effect of OFDI to trade structure.The result shows that China’s OFDI has a strong effect on the improvement of trade structure. This was intrigued by different motivations of China’s OFDI and we analyzed their different effects to trade structure. Our model also shows that FDI, processing trade, R&D have different influences to trade structure. According to the conclusion of our research, we put forward our recommendation that Chinese government should go on supporting internal enterprises to go out.