The Impact Of FDI On The Export Competitiveness Of China's Manufacturing Industry

With the continuous development of economic globalization,China has made remarkable achievements in attracting foreign direct investment(FDI).China continued to attract the largest amount of foreign investment,with a record $144 billion in foreign direct investment in 2017.It is also the world's second largest inflow of foreign investment after the United States.With the increasing investment of multinational companies in China,the FDI in China's manufacturing industry is developing rapidly.In 2016,the manufacturing industry absorbed FDI to 35.4 billion USD,which accounted for 28.17%of the total FDI in China.Meanwhile,the rapid development of manufacturing FDI also promoted the development of China's manufacturing export trade.In 2016,manufacturing exports amounted to 1965.692 billion USD,accounting for 12.23%of the world's total manufacturing exports.By analyzing the impact of FDI on the export competitiveness of China's manufacturing industry,we can promote the optimization and upgrading of China's manufacturing industry,and provide a theoretical basis for the transition of Chinese manufacturing exports from labor-intensive to capital-intensive and technology-intensive,which can enhance the export competitiveness of China's manufacturing industry.Previous studies have used the RCA index based on traditional trade value to measure the export competitiveness of China's manufacturing industry,which can no longer truly reflect the export competitiveness of China's manufacturing industry under the background of economic globalization.This paper uses the RCA index on the basis of the value added of trade to measure the export competitiveness of China's manufacturing industry,and empirically analyzes the impact of FDI on the export competitiveness of China's manufacturing industry by means of econometric methods.This paper intends to explore the impact of FDI on the export competitiveness of China's manufacturing industry,analyzes the development characteristics of China's manufacturing industry through foreign trade,foreign direct investment and export competitiveness on the basis of combining relevant research.,Industry scale,R&D investment and labor cost have been selected as control variables,and panel fixed effect model is applied to the empirical analysis.The thesis includes six parts:the first part is the introduction and mainly introduces the background and significance of this study,the proposed problems,research categories,the structure of the article and research methods,as well as innovative points and limitations etc.The second part is the literature review,which includes the trade effect of FDI,exports competitiveness and the value added of trade.It is found that there are many researches on the influence of FDI on the export competitiveness of host country.However,in the study of the measurement of export competitiveness,most scholars used the RAC index based on traditional trade value,which is difficult to reflect the current global economic integration and industrial division of labor trends under the actual level of China's manufacturing export competitiveness.The third part is the current status of China's manufacturing industry and is mainly analyzed in three aspects:firstly,the development characteristics of China's manufacturing export trade.This paper discusses the characteristics of China's manufacturing exports from 2000 to 2014 through both the overall and internal structure.Secondly,the characteristics of foreign direct investment(FDI)in Chinese manufacturing industry.Thirdly,the characteristics of the export competitiveness of China's manufacturing industry based on the value added of trade.This part firstly introduces the evaluation index of manufacturing export competitiveness,including international market share,trade competitiveness index,dominant comparative advantage index and dominant competitive advantage index.Then,secondly,by analyzing the changes of RCA index in 15 manufacturing industries from 2000 to 2014,this paper analyzes the characteristics of Chinese manufacturing export competitiveness.Results indicate that China's manufacturing exports are gradually changing from labor-intensive to technology-intensive,and the technical level of export products is constantly improving.Then,the export competitiveness of mobile intensive manufacturing industry is significantly higher than that of capital-intensive and technology-intensive manufacturing industries.It shows that the export competitiveness of Chinese manufacturing industry mainly depends on the advantage of labor cost.Chinese manufacturing enterprises should increase the development of technology and patent in order to enhance the export competitiveness of technology-intensive industries.The fourth part is the theoretical analysis of FDI's trade effect and value added effect.It mainly includes two aspects:Firstly,the path analysis of FDI affecting the export competitiveness of manufacturingindustry,including capital formation,industrial structure upgrading and technology spillover.Secondly,apart from FDI,other determinants of the export competitiveness of China's manufacturing industry are analyzed.There are various factors influencing the competitiveness of a country's product export.Combined with the characteristics of China's manufacturing industry,this paper mainly selects three factors:labor cost,enterprise size and investment in R&D to analyze the impact of FDI on the export competitiveness of China's manufacturing industry.It lays a theoretical foundation for the empirical analysis for the empirical analysis.The fifth part is the empirical analysis.This part makes an empirical study on the relationship between manufacturing export competitiveness and FDI from 2000 to 2014,selecting industry scale,R&D input and labor cost as control variables,and analyzing by establishing panel fixed effect model.The results show that FDI,industry scale and R&D investment have a positive impact on export competitiveness,while the increase of labor costs is not conducive to the development of export competitiveness.Besides,the scale of manufacturing industry,R&D input and labor costs are less effective than FDI on export competitiveness.The sixth part presents main conclusions and policy recommendations.This thesis proposes policy recommendations with regard to the export competitiveness of China's manufacturing industries,based on the analysis and the status quo of the export competitiveness of China's manufacturing industries.Specifically,market-oriented FDI should be encouraged,institutional reformations should be further continued,and school-enterprise cooperation should be further supported.