Simple Study Of The Trade Effect Of FDI By China

The trade open with globalization, foreign investment and innovation is generally thought the main factor of the postwar growth's experience.With the new variety of international economy form,international direct investment has become the most important and active factor of promoting the world's economic development nowadays.Foreign direct investment has the influence to mother country domestic economy,these influence has the beneficial and disadvantageous aspect,and sometimes intertextures together.Study on FDI economic effect,especially on FDI trade effect,is able to explain FDI's influence to our country's trade,meanwhile,can supply certain basis and truewar experience to Chinese FDI's further development.In the substantial evidence research, economic scholars generally examine the FDI's effect from trade,employment,investment,national income,economic growth,company growth etc.This research concentrates on trade effect study of Chinese FDI.Examining the relation of FDI and trade,this research will solve two problems: (1) Chinese FDI is trade creation or substitution? If the direct investment in a host country causes the export or import more highly,so FDI is trade creation;whereas,if FDI and trade is internationalization mode mutually,the direct investment in a host country causes trade decreasing between the mother and host country,so the FDI is trade substitution.(2)Is trade creation or substitution different for host country?A big part of evidence dosen't explain that the certain contact between mother and host country cause possible difference to FDI's trade effect.We examine the difference of different host country's economic development, the distance to china,whether constitute the main factor in space variety of Chinese FDI.The main conclusion is:the direct investment china to host country promotes the export,but represses the import from host country .The trade effect of Chinese FDI has the space difference,it explains the intimating between china and host country influences the space variety in trade effect of Chinese FDI.