Game Research On The Spillover Effect Of Chinese Export Caused By Direct Foreign Investment

With China's further reform and opening up, the influence of foreign direct investment on economy of China is growing. As the main feature of international development, economic globalization is irreversible. On the one hand, the level of performance for lower tariffs, on the other hand for the performance of foreign direct investment to flourish. As one of most promotion of globalization of economics, the importance of foreign direct investment has drawn wider attention, and on foreign direct investment in the host country's export industries of the spillover effect of export awareness of the problem has continued to deepen. It has promoted the rapid growth of China's GDP, and enhanced the industry's competitiveness, especially the increase of foreign investment, and the rapid growth of export industries of China. To attract more foreign investment and achieve the further growth of exports, many export sectors compete with each other in attracting foreign investment. However, enterprises have to pay the price to attract foreign investment. With the changes in foreign investment, foreign-invested enterprises will occupy the export share in the industry. Therefore, how to achieve the maximum spillover effect is the key point in attracting foreign investment. In this paper analyzes the relationship between foreign investors and export trades with Game Theory based on the foresaid background, and discusses the way to achieve maximize exports spillover effect of the export industry.Generally, this paper uses Game Theory to analyze the foreign direct investors and export sectors. For two similar competitive export industries competing for a foreign investment project, we shall use incomplete information static game theory analysis model - the auction model, to analysis the export industry of conduct. Later, on the difference between the analyses of the export industry, the paper establishes a foreign investment option cost model through the analysis of the cost of the options to determine how foreign investors choose different export industries. Through the selection of these models and analysis, we can gradually understand the impact of foreign investment on China's exports spillover effects.First, this paper introduces the influence of foreign investment and export. According to the data and other information of last few years, the export of various industries are mainly influenced by foreign investments of different factors It introduces the connection and interaction between foreign investment and exports based these data and charts.Then, we have set up a Game object assumption. Through assumptions, we made a very easy target of the theoretical studies of objects. Meanwhile, we analyze the game profits of the both objects - foreign direct investors and export sectors. In this analysis, through the assumption, we have adopted the Game income, the game costs, and the game profits of the foreign direct investors as well as the export sectors. Through these quantifiable costs and the establishment of income for the analysis, it makes the discussion clearer. According to the characteristics of this object, we will say that, the export industry revenue, costs and benefits are the export promotion, export trade, and inhibiting amount and spillover effect of export.After establishing the profit function of both parties of the game, the paper establishes the incomplete information static game model - the auction model, and analyzes the process and results. Through the analysis, we believe that the two similar export industries in the course of the game theory, when the price of their exports for half of the exports, the spillover effect of exports will reach the largest. This conclusion shows that, in order to obtain the largest export trade spillover effect in attracting foreign competition, export industries is necessary to carefully consider the Price. Normally, when there are only two sectors are involved in the game, its bid should be its own half of export promotion. This time, the industry's export spillover effects were to the greatest. When participating in the export game industry is not homogeneous, that is, when there are differences, we will analysis the foreign investor Game choice through the establishment of foreign investors of the choice of the cost model. Through analysis, the conclusion reached was that little difference in the sectors where foreign investors will choose to invest in high-tech industries; when low-technology industries provide more preferential policies to attract foreign capital, or substantially reduce trade restrictions, it can be competitive in attracting foreign investment to win a place. This also pointed out the direction that, to increase its exports spillover effect of export industries they must attract more foreign investment. So that, they know how to improve their strength through to attract more foreign investment and foreign trade, also how to make exports to achieve the maximization of spillover effects.Finally, in front of these paper results of the analysis of China's foreign trade and export sectors, we proposed related policies for attracting foreign investment and increasing the export spillover effect. It mainly includes: raising all exports of technology innovation and technology content; significant reducing restriction on low-skilled industries, raising the industry preferential policies to attract foreign capital, and establishing collusion Game mechanism in the process to elimination of foreign investment in super - national treatment. This allows us understand the connection between foreign direct investment and China's exports, so that the national policy makers will establish more positive policies to increase the attraction to foreign investment, improve our export quality and quantity, and improve our national competitiveness.