The Research On Trade Effect Of China’s Direct Investment In Cambodia

Cambodia is one of the new member states of ASEAN and one of the member countries of the Greater Mekong Subregion(GMS).It is also a country along "the Belt and Road"of China.There are many platforms for cooperation between China and Cambodia.For more than a decade,China has been the largest source of direct investment in Cambodia and Cambodia has become one of the important destination countries for Chinese companies to invest abroad.China and Cambodia have achieved remarkable results in cooperation in infrastructure,transportation,electric power,industrial parks,and agricultural planting.At the same time,China is also Cambodia’s main trading partner.From the overall development of investment and trade,China’s investment in Cambodia and bilateral trade volume have maintained an upward trend.Studying the impact of China’s direct investment in Cambodia on the quantity and structure of bilateral trade between China and Cambodia can not only enrich the theory of foreign direct investment in developing countries but also make corresponding recommendations to the Chinese government and enterprises.First of all,based on the theoretical research of OFDI and the research on China and Cambodia economic and trade literature,this paper combines the information obtained by the author in Cambodia to analyze the current situation of China’s direct investment in Cambodia and bilateral trade.It analyzes in detail the scale,investors and field of China’s direct investment in Cambodia,summarizes the investment motives and investment characteristics of Chinese-funded enterprises and proposes the risks of China’s direct investment in Cambodia.The paper analyzes the scale and structure of bilateral trade between China and Cambodia in detail using multiple charts.It analyzes the structure of bilateral trade between China and Cambodia by using the classification criteria of International Convention for Harmonized Commodity Description and Coding System and summarizes the problems existing in bilateral trade between China and Cambodia.Then,selecting relevant data on China’s direct investment in Cambodia,China-Cambodia bilateral trade,China’s export of manufactured goods to Cambodia,and capital and technology-intensive manufactured exports from 2003 to 2017.The relevant data were sequentially subjected to ADF test,Johansen cointegration test,Granger causal analysis and OLS regression analysis.This paper draws two main conclusions.First,China’s direct investment in Cambodia and the bilateral trade between China and Cambodia are complementary and the export creation effect of investment is less than the import creation effect.Second,China’s stock of direct investment in Cambodia promotes China’s export of industrial manufactured goods to Cambodia.The promotion of capital and technology-intensive products in industrial manufactured goods is slightly greater than the impact on industrial manufactured goods.China’s direct investment in Cambodia has optimized the structure of Chinese exports to Cambodia.According to the empirical results and the actual situation,the causes of the Sino-Cambodian trade effect are analyzed.Finally,measures for China’s direct investment in Cambodia and bilateral trade are combined with the risks raised in Chapter 2,the problems summarized in Chapter 3 and the analysis of the results of empirical tests from the perspective of government and enterprises.Making the following recommendations to the government:Encouraging Chinese-funded enterprises to increase investment in Cambodia’s capital and technology;Increasing support for small and medium-sized private enterprises;Solving the common problems of Chinese-funded enterprises in Cambodia;Increasing imports from Cambodia and optimize the bilateral trade structure.Advising enterprises to actively join Chinese-funded enterprises in the Cambodia Chamber of Commerce and enhance the image of enterprises in Cambodia.