Research On The Relationship Between FDI And Trade

Since reform and opening-up, China has opened its domestic market gradually. The foreign trade volume of China has been increasing sharply as well as the foreign direct investment (FDI) into it at the same time. Whether is there a certain connection between the two? Whether does the entry of FDI make the trade of China increase? This will be discussed in this article. In addition, with opening its eastern coastal areas, China established several special economic zones there, which make the coastal areas develop more rapidly than the central and west regions of China. It may be the main reason that FDI increases in these areas, and it promotes the economic development there. On the other hand, eastern area has also achieved great deal trade development by its convenience in communications with other part of the country and with the world as well. This article will carry on the demonstration research about the effects of the inflow amount of foreign capitals on the economic and trade development respectively in different regions of China. We will analyze further according to the results of study the relationship between FDI and foreign trade in detail, and try to find out what have caused the inter-regional unbalanced development in China. And we will put forward the policy of better attracting and utilizing FDI with cooperative forces granted by the central and west regions and eastern area, in order to make full use of the positive role of the foreign capitals, and sequentially make a faster development of economy and trade harmonized and balanced in all regions of China. Then it will make China stride toward a new developing period.