Research On Trade Effect And Development Countermeasures Of China Japan And Koreas’ FDI

With the outbreak of subprime crisis in 2009 and the trade of economic integration, the recession and pessimistic expectations for development lead all countries to seek a new path to speed up the development of economy. In order to make full use of market and resources at home and abroad, many countries pay more and more attention on their foreign direct investment. Foreign direct investment has become an important economic tie between countries.As the world’s second largest economic entity, China began to implement the strategy of "going out" to create more opportunities for China’s economic development. Foreign direct investment has many positive effects like industrial upgrading and cost reduction, at the same time, it can also bring unemployment, replacement of export trade and other negative effects. Therefore, how to invest in a correct way to improve the national interest is quite important. China, South Korea and Japan are three typical countries which at different stage of development. They have different invest history and status.At the same time, the trade effects brought by FDI also vary from country to country. But in all, the level of China’s economic development and steps of its foreign investment are obvious slower than Japan and South Korea. As neighbors and closely cultural relatives, though they are different in industry structure, technology level and economic development,the successful experience of their FDI’s development still teach us a lot and give us good example on how to take full use of FDI towards other countries. And the purpose of this article is to use the experience of Japan and South Korea to get a suitable and healthy road for the development of China’s foreign direct investment.In this background, this article will analyze the history of Japan and South Korea’s foreign direct investment to deeply understand the present situation of the foreign direct investment. Then it summarizes the experiences and lessons of Japan and Korea in the development of foreign direct investment, make policy suggestion on the development of China’s foreign direct investment. On this basis, this article will focus on the empirical analysis on trade effect of Japan Korea and China’s foreign direct investment, the empirical analysis using panel data on these countries and their major trade countries. It is based on trade gravity model and explores the trade effect of FDI from two aspects of import and export. Through this way, this article analyzes the three countries’investment and trade situation and puts forward some advice in consideration of characteristic of China’s economy and the development plan on future.