The Research On The Influence Of China's OFDI On Export

Since reform and opening-up,the achievement of China's economic development has attracted worldwide attention.China's GDP(Gross domestic product)came second in the world,as the largest developing country.Facing with complex international economic environment in recent years,the government of China is vigorously advancing the strategy of "going out".The strategy leads to the increasing of China's Outward Foreign Direct Investment(OFDI)and become a community increasingly concerned issue.In 2016,China's OFDI flows is the second largest in the world,rank only second to the United States,and the OFDI stock has been up to the sixth around the world.It is meaningful for China to study the relationship between OFDI and export so that we can make full use of national policies and economic environment to expand the degree of opening and achieve better and faster development of foreign economic.There is a long history for researchers to focus on the topic of the effect of OFDI to explore.This article continues the tradition,use China as the home country to research the effect of OFDI to export and explore whether the effect is consistent between different regions in China.Previous research divided the effect into substitute effect and complementary effect.According this classification,this paper uses 29 provinces' data from 2003 to 2016 to explore the effect of OFDI to export.Besides that,it gives the impact mechanism of the effect based on the theory of demand.This article is divided into six parts.Firstly,the introduction expounds the research background,significance and methodology.Chapter 2 mainly expounds theories of foreign direct investment and international trade.At the same time,research achievement of what is the effect of OFDI on exports is included in this chapter.Chapter 3 describes the actuality of OFDI and exports in China.Chapter 4 will explain mechanism of how OFDI influent exports based on the theories and China's actuality mentioned above.Chapter 5 is empirical research.This paper use data of 29 provinces in China from 2003 to 2016 to research the relationship between OFDI and exports.Lastly,in the chapter 6,conclusions and suggestion s will be given.There are main findings of this paper:(1)There is a complementary relationship between outward foreign direct investment and export trade;(2)At present the OFDI and export is in the upward phase of the inverted “U” curve;(3)The complementary relationship between OFDI and exports is obvious in eastern and western China,but the relationship is damaged in midland China;(4)It is effective for China's policies which have positive effect on domestic economy.It also gives some suggestions: On the one hand,China government needs to complete and perfect the macro policy and provides a free and open environment.At the same time,narrowing the gap in different areas and guiding the upgrading of industrial structure is also important.On the other hand,enterprises need to take part in international economic affairs actively and make different internationalization strategies consider the different situation.