| Throughout the global economic activities, foreign direct investment and trade between countries are the main components of it. To explore the relationship between them is to understand how to promote the development of international market. According to the analysis of different countries, the relationship between foreign direct investment and international trade can be divided into creative, alternative and mixed type, which is due to the different states, methods and angles. This paper focus on China and the five Central Asian countries, discussing the relationship between international trade and foreign direct investment in China. Meanwhile, the reason why this paper chose the five Central Asian countries as the research object of study is that China has proposed the "Silk Road Economic Belt" which directly aimed at the five countries.The stock of direct investment of China and the five Central Asian countries was only 44 million dollars in 2003, while in 2014 it had exceeded 100 billion U.S. dollars, which shows the enormous potential of the investment market in Central Asian countries. In terms of trade, the foreign trade volume between China and the five countries in Central Asia has continued to increase. Since the Chinese and the Central Asian countries to establish foreign trade relations in 1992, bilateral trade development has made remarkable achievements. In 1992, the total trade for Central Asian countries and China was 464 million dollars, and added to 45 billion dollars in 2014 increasing by 95.93 times in 23 years. This indicates that the tendency of trade between China and Central Asian countries is strong and yielded fruitful results.Under this background, it is very important to study the trade effect of China’s foreign direct investment, and to explore the relationship between China’s investment and trade. At present, China’s foreign trade and economic cooperation with developed economies, such as the United States and Europe, has been more mature and the cooperation with neighboring ASEAN is also more smoothly as well as gradually on the right track. However, it is more difficult to achieve further rapid progress. Central Asian countries in the west of China still exists a lot of investment potential. So the study of trade effects of China’s direct investment on Central Asian countries, can not only be more effective to China’s "Silk Road Economic Belt", but also can open the new breakthrough of China’s foreign direct investment.This article will be based on the study of foreign direct investment and trade effects of China and the five Central Asian countries. First of all, after sorted out the study of the foreign direct investment trade effect researched by the domestic and foreign scholars, I found that there are few scholars to study the effect of China’s direct investment on Central Asian countries trade. Secondly, systematically analyzed the trade and investment situation of China and the five Central Asian countries in recent years, subsequently I found that the development of foreign trade and economic cooperation between China and the five Central Asian countries is in good condition. Both the amount of investment and trade have a superior growth rate. But there are also many problems, as for investment, first China’s investment in the countries of Central Asian countries is not balanced which mainly concentrated in Kazakhstan. Second, China’s industrial investment in Central Asian countries is not balanced, which is primarily located in the field of energy. On trade, first, China’s trade balance between the Central Asian countries showed polarization, which is principally reflected in the trade gap of Kazakhstan and Turkmenistan, while the other three countries showed a trade surplus. Second, commodity trade structure of China and the five Central Asian countries is irrational. The main export products are centralized on light industry and high-tech products while the import concentrated in the fossil energy and mineral resources.Third, I studied the effect factors of China’s impact on Central Asian countries’ direct investment, and analyzed China’s trade effect on the central countries’ direct investment. Then I used econometric methods to test the trade effect of China’s direct investment to the five countries in Central Asia’s. The conclusion is that China do exists trade effect in the Central Asian countries’ direct investment, and regardless of exports or imports, they all belong to trade creation effect. China’s export creation effect to the five Central Asian countries’ direct investment and import creation effect exist obvious national differences. Among them, China’s export creation effect to Tajikistan direct investment is most obvious while import creation effect of Turkmenistan is most explicit. The reason to obtained these results coincide with the actual situation. Finally, based on the above conclusions, I provided the measures which can strengthen investment cooperation between China and Central Asian countries. First, when put forward the economic and trade cooperation between China and the five Central Asian countries, government should given more policy support. Second, based on the different degree of investment to create trade in different countries to adjust the intensify of investment. Third, in the process of investment cooperation we should pursue a win-win situation and adopt more green investment strategy. Fourth, we should strengthen inter enterprise communication to create a harmonious investment atmosphere. |
