Studies On The Trade Effect Of China's Foreign Direct Investment In Myanmar

As economic globalization continues to deepen,economic exchanges between countries have become more frequent.As the important ways to participate in the international division of labor,foreign direct investment and international trade have also received more attention from all sectors of society.China ' s foreign direct investment started late,and it had been a net inflow country of foreign capital until the latest century.However,with the rapid growth of China's economy and the further implementation of the "Go globally" strategy,China has achieved a lot in the field of foreign direct investment.In 2017,China's foreign direct investment reached 158.29 billion dollars,ranking third in the world after the United States and Japan.In September 2013,President Xi Jinping put forward the Belt and Road Initiative to further deepen the economic and trade exchanges between China and the related countries,thus further releasing the investment vitality of domestic enterprises and providing a new historical opportunity for the development of China's foreign direct investment.Myanmar is an important country along the “Belt and Road Initiative” and a friendly neighbor of China.It has an extremely advantageous geographical position and is located at the junction of South Asia and Southeast Asia.It is the only way for China to enter the Indian Ocean through land.In addition,Myanmar is rich in natural resources and human resources,and complements China in terms of resource endowments and industrial structure.In recent years,under the continuous promotion of the “Belt and Road Initiative”,the Chinese government has been vigorously supporting Chinese companies to invest directly in Myanmar,in the hope of giving full play to their complementary advantages.However,with the continuous deepening of China-Myanmar economic and trade cooperation,the two sides have also encountered many difficulties.At present,China's investment in Myanmar is facing challenges.After China's investment in Myanmar reached a peak of 875 million USdollars in 2010,it began to decline.In 2017,China's investment in Myanmar was only428 million US dollars.In terms of trade,China has long been in a surplus with Myanmar,and the trade imbalance is very serious.Under this circumstance,it is of great significance to study whether China's investment in Myanmar has a trade effect and what kind of trade effect it has,which is helpful for China to adjust the investment structure to invest in Myanmar more effectively and solve the trade imbalance between China and Myanmar.Based on the previous research results and methods,this paper will explore the relationship between China's foreign direct investment and trade with Myanmar based on the theory of foreign direct investment and the combination of theoretical analysis and empirical analysis.First of all,this article will introduce China's investment and trade status and characteristics of Myanmar,and describe the scale and structure of China's investment and trade in Myanmar in recent years,paving the way for the subsequent regression analysis.Furthermore,the relevant data of China's foreign direct investment and bilateral trade with Myanmar in 2004-2017 were selected,and the gravitational model and time series analysis method were used to empirically analyze the trade effect of China's foreign direct investment in Myanmar.The analysis shows that the long-term impact is more significant than the impact of foreign direct investment in the short term.In the long-term,China's direct investment in Myanmar has significantly promoted bilateral trade between China and Myanmar,and the effect on China's import trade is more obvious.It illustrates that increasing investment in Myanmar will alleviate the trade imbalance between China and Myanmar to a certain extent.Thirdly,based on the empirical results and the foreign investment motivation theory,the reasons for China's trade creation effect on Myanmar's OFDI are explored.Finally,according to the problems existing in China's investment in Myanmar,relevant policy recommendations are given at the national and enterprise levels.under the promotion of the “Belt and Road Initiative”,the Chinese government should continue to increase support for enterprises to invest in Myanmar and give full play to the complementary advantages of China and Myanmar,so that the creative effect of China's direct investment in Myanmar benefits both countries.Finally,both countrieshave become builders and beneficiaries of the “Belt and Road Initiative” and promote the economic cooperation between China and Myanmar into a new historical period.