Research On The Trade Structure Effect Of China's Direct Investment In The Five Countries Of LMC

Today,China's economy is developing rapidly,America Strengthens Asia Pacific Strategic Rebalancing,accelerating global economic integration.As a major player in economic globalization,China is facing changes in the international situation,In order to increase the impetus for economic development,China has continuously proposed new strategies to enable it to stand on a wider field,a wider scope and a higher level of competition to conduct economic and trade cooperation with other economies.GMS(Great Mekong Subregion Cooperation)cooperation between China and the five countries of LMC still dominates,Changes in the economic and political environment of countries in the region,GMS's effectiveness in dealing with political mutual trust,non-traditional security and security cooperation has decreased and make it difficult for the economic and trade cooperation between China and the five countries in LMC to achieve substantial development.The mechanism of LMC has to a certain extent,broken through the development bottlenecks between countries in the region,make new attempts and challenges for deep-level economic and trade cooperation between countries.LMC is a new peripheral sub-regional cooperation mechanism led by China and co-sponsored by the six countries,to build the principles of the Asian community of destiny.Research on the effect of China 's home country trade structure on FDI to the five countries,and to promote China 's better investment and cooperation with the five countries and regions,strengthen trade exchanges,build a community of Asian destiny,and help ASEAN integration and regional integration,promoting South-South cooperation is of profound significance.This article sorts out the literature on the relationship between direct investment and trade,and the structural effects of direct investment,explore the mechanism of FDI impact on the home country's trade structure,The impact of FDI on the trade structure of the home country is divided into two perspectives,direct and indirect,Direct impact refers to the optimization of the structure of import and export commodities,which is caused by the unchanged motivation of FDI of the home country enterprises,the direct impact of direct investment on the home country's trade structure is mainly based on four investment motivations: market-oriented,efficiency-oriented,resource-oriented,and strategic asset-oriented;Indirect impact refers to changes in the structure of the foreign trade commodity structure of the home country due to the industrial transfer and changes in the domestic industrial layout caused by the home country's FDI.t hereby affecting the import and export trade structure.The mechanism exploration lays the foundation for the following realistic description and empirical analysis.Second,this article analyzes the 15-year FDI and trade structure data of China and the five countries of LMC,analyze the status quo of China's FDI in the five countries in LMC,including the total scale of direct investment and the main investment areas,and the current status of China's import and export trade with the five countries in LMC,including the total scale of trade and the main import and export commodities.In the past,China's investment in the five countries of LMC was mainly concentrated in resource and labor-intensive industries.Nowadays,investment fields are gradually diversified,and investment in manufacturing,services(leasing and business services),and wholesale and retail industries is continuously optimized.In terms of trade scale,on January 1,2010,the China-ASEAN Free Trade Area was fully launched,and China's trade volume with the five countries of LMC increased significantly,in terms of trade structure,capital,technology,and labor-intensive products dominate China's exports to the five countries,and imports are dominated by resource-intensive products.Third,based on the empirical analysis of China 's direct investment and trade data of the five countries in the LMC from 2004 to 2018,the empirical results show that china's FDI in the five countries of LMC,In terms of exports,it will promote the export of capital-intensive products in the home country,create a trade creation effect,produce a trade substitution effect on the export of resource-intensive products,and have no significant impact on labor-intensive products;In terms of imports,it has a trade substitution effect on the import of capital-intensive products and a trade creation effect on the import of resource-intensive and labor-intensive products.Because of China's rapid economic development,high population density,demographic dividends are slowly disappearing,and the degree of aging is constantly increasing,resulting in high domestic land price costs and rapid growth in average wage levels.Compared with China,the five countries of LMC have rich land resources,low acquisition costs,and cheap labor.Therefore,the export of China's FDI has helped domestic labor-intensive industries to reduce production costs,the domestic labor-intensive industries and resource-intensive industries are gradually transferred to the five countries of LMC,On the one hand,due to direct investment in alternative product exports,domestic market demand has begun to be imported from the host country,optimizing the trade structure of the home country.On the other hand,the transfer of domestic industries and changes in the industrial structure affect changes in the structure of imported and exported goods.Fourth,based on theoretical and empirical conclusions,policy recommendations are made to increase China's direct investment in the five countries of LMC,Government: formulate specific "guidance opinions" to standardize foreign direct investment of enterprises,establish special funds for foreign direct investment,and control the risks of foreign investment of enterprises;Enterprise: operating enterprises legally and in compliance,shaping the corporate image,establishing a reasonable investment exit mechanism,and investing in sustainable development projects.Foreign direct investment of enterprises,Investment failure due to poor or misunderstanding of the host country's investment environment,investment policy,national culture,and labor policy.The government should give full play to its political role,on the one hand,enterprises are encouraged to make outward direct investment in the five countries of LMC and regulate their direct investment.on the other hand,deepen exchanges with the host government on economic and trade cooperation through visits,to provide green channels for Chinese enterprises' direct foreign investment.Enterprise should develop a sensitive response to changes in the host country's investment policy environment.Today,the Belt and Road Initiative is implemented,establish ASEAN,LMC mechanism,Bangladesh-China-India-Burma economic corridor.Enterprises should give full play to their comparative advantages and creative capabilities,respond to the country's global strategy,and address the opportunities and challenges of world economic integration.