Research On The Effects Of Japan’s Direct Investment In ASEAN On Bilateral Trade

Under the background of economic globalization and developing imbalance of world economy, East Asia economy has been maintaining high rapid development in recent decades.As the locomotive of economic development in Asia, Japan has played an important role to East Asia’s economic development. In the1990s, Japan’s bubble economy burst which made a throwback to Japan and its economy had been in a recession, these made Japan for new thinking and adjustment on its economic development tendency. It is beneficial to the economic development of Japan and other East Asian countries that communication between Japan and other East Asia countries in depth and breadth of the economic development is deepening and expanding unceasingly. There are strong complementarities in the condition of economy and resource between Japanese and East Asia countries which is one of the main reasons why the economic communication between Japanese and East Asia countries is so frequent. The Southeast Asian financial crisis happened in1997has made south-east Asian nations more aware of the importance of strengthening economic exchanges with other East Asian countries. At the same time, the economic integration of East Asia countries is becoming the main trend of economic development of East Asia.Since the1960s, most countries in the East Asia successively take transnational direct investment and foreign trade as the core of the developing strategies of national economy. To East Asia countries, the use of foreign direct investment and the development of foreign trade become the main way of integrating with the world economy and leading to the road of power. Postwar Japan due to their scarce resources had to rely on the export-oriented economic development model to develop their economy, and made use of economic complementarities between Japan and ASEAN to deepen economic ties with the association of south-east Asian nations (ASEAN).At the end of last century, with the rapid development of global FTA, Japan increasingly felt the importance of bilateral trade. Since failure of Seattle, many countries felt disappointed for the slow process of the multilateral trade under the framework of WTO, hence established free trade areas with their close countries. Especially China’s positive attitude to joining in regional cooperation of East Asia formed a lot of pressure on Japan, and made Japan’s voice in East Asia shaken. In the early20th century, Japan put forward to establish Japan-ASEAN free trade area and "Mr Koizumi’s idea", and vigorously developed bilateral free trade. At present, it’s difficult for Japan’s economic development pattern and structure to promote the development of economy, so Japan need to change the trade policy to get rid of the trouble. Now, the association of south-east Asian nations (ASEAN) is in a crucial period of rapid economic development, and Japan’s direct investment and industrial transfer not only promote the rapid economic development of ASEAN, and technological progress, innovation of industrial structure, personnel training, etc.The economic and trade cooperation of Japan and ASEAN has an advantage position in the foreign economic cooperation of Japan. With the promotion of position and role of ASEAN, the economic and trade relations of ASEAN and Japan is deepening. The total volume of trade between Japan and ASEAN is on the rise. The bilateral trade volume rises from65billion in1990to255billion in2011, an increase of nearly4times. Meanwhile, the total amount of the mutual investment between Japan and ASEAN is also increasing. Bilateral mutual investment increases from1.6billion in1990to5.7billion in2009, increased by3.5times. Recently, according to the world trade and investment report published by Japan external trade organization, Japan’s total investment to Japan increased by55.4%compared with the same period in2012, and reached a record of＄10.2billion, more than twice of the direct investment to China.This paper respectively from the macro and micro Angle introduced related research results of the trade effect of direct investment, and analyzed the relationship between the investment and trade of Japan and ASEAN in theory. This article mainly, referring to the specific factor model analyzed the relation of investment and trade between Japan and ASEAN, and the results of the analysis showed a complementary relation of Japan’s direct investment to ASEAN and bilateral trade. Secondly combined with dates of Japan’s direct investment to ASEAN and trade of Japan and ASEAN, carry out the descriptive analysis and state influence on the trade structure of Japan’s direct investment to ASEAN, analyze reasons of trade effect of Japan’s direct investment to ASEAN. Finally, for the research whether there is a dynamic change in trade effect of Japan’s direct investment to ASEAN in different period, this paper established the gravity model and the phases of trade effect of Japan’s direct investment to ASEAN model, and along with the panel data use methods——such as the unit root test, granger causality test——to conduct analysis of regression. Through the above analysis, recognize that Japan’s direct investment to ASEAN have creation effect in bilateral trade。As there are large differences between the industrial structures of the two sides, the improvement of direct investment can promote the expansion of bilateral trade scale. It gives us enlightenment that investments drive trade, and because China’s FDI is in the exploratory stage, and china is a big country to accept foreign direct investment and develop foreign trade, the research of trade effect of Japan’s FDI to ASEAN has theory value for our country to accept foreign investment, conduct foreign investment and develop foreign trade.