Research On The Impact Of China's Foreign Direct Investment On The Trade Of Countries In The Background Of The "One Belt And One Road" Initiative

In the past 40 years of reform and opening up,foreign direct investment in China and China's foreign trade have developed rapidly.China's foreign direct investment has also continued to grow steadily from scratch with the increase in China's openness,and foreign in'vestment flows have increased substantially.The volume of import and export trade has doubled.Under the dual influence of huge foreign trade surplus and foreign investment policy,China's foreign exchange reserves reached the world's first,accounting for about one-third of the total foreign exchange reserves.In 2013,General Secretary Xi Jinping formally proposed the "One Belt and One Road"initiative.The proposal of China's initiative not only further strengthens China's foreign investment in countries along the "Belt and Road",but also further expands the trade routes between China and the countries along the line.Improve bilateral trade between China and other countries.This paper sorts out the relevant researches of scholars in the past,adopts the trade gravity model,and takes China's total import and export trade as the explanatory variable.China's direct investment flow to the host country as the core explanatory variable,and then introduces the "One Belt and One Road" virtual policy variable.Regression analysis was performed by the FE(fixed effect)model.The research shows that,first of all,as far as the overall sample is concerned,there is a positive correlation between China's foreign direct investment flows and total bilateral trade.The "One Belt and One Road" initiative has gradually changed the positive correlation to negative correlation.Secondly,the sample is divided into The high-income group and the low-middle income group returned.After the introduction of the "One Belt and One Road" initiative,it was found that in the low-and middle-income group,China's direct investment flows to the host country were positively correlated with the original negative correlation;The two variables change from positive correlation to negative correlation.In addition,by introducing the change of interest rate as the instrumental variable of China's direct investment in the host country,the result proves that China's foreign direct investment is also affected by the interest rate factor of the host country;Based on the interpretation of the connotation of the regression results,and put forward policy recommendations for the development and promotion of the "One Belt and One Road" initiative.