Japan's Direct Investment In China And It's Impact On Sino-Japanese Trade

China starts to attract the foreign direct investments from the 20th century 70's last stages. To the early 21st century, external foreign direct investment in China's economy has occupied an important position. With China's continued rapid growth in attracting foreign investment, the studies of the direct investment in China and China's foreign trade are especially important. Analysis of Japan's direct investment and the status of Sino-Japanese trade and the Japan's direct investment in the impact on Sino-Japanese trade is very important.Japan is one of China's main source of foreign investment and trading partners. Study of Japanese direct investment in China and Japan's direct investment in China on Sino-Japanese trade, will help the Chinese government develop a reasonable trade policy on Japanese direct investment in China and the Sino-Japanese Trade. Japan's direct investment in China and Sino-Japanese trade is an important part on bilateral foreign trade and economic relations. Upon the many years efforts of the two governments and economic circles, Japan is China's second largest source of foreign investment country and Japan is China's third largest trading partner. At present, analysis of international direct investment and international trade of domestic scholars less than normal. This paper had make a preliminary analysis study on Japan's direct investment and Japanese direct investment in China on Sino-Japanese trade. These analysis based on the results of economists before and the recent paper.Japan is China's close neighbors, but also the world's second economic power, having a very closely cooperation in economic and trade with China. Since 1993, China became the largest developing country which received Japan's direct investment. After 1996, because the United States had the faster growth in direct investment in China,. Japan had a slight decline and become China's second largest foreign investor. In 2005, Japanese direct investment in China reached 6.53 billion U.S. dollars, had 19.8% increase over 2004,and 27.4 times increased by the 230 million U.S. dollars of the in 1986. In Sino-Japanese economic and trade relationship, Japan's direct investment in China occupies a very important position. Japanese direct investment in China started in 1979, the Japanese direct investment in China is only 14 million U.S. dollars in 1979. In the 20th century 80 years, the Japanese direct investment in China began to rise, but the growth is slow. Japan's direct investment have a rapid growth in 90 years. At present, Japan has become China's second major source countries of investment and technology. Sino-Japanese trade scale has remained relatively steady growth trend. From 1993 to 2003, Japan had become China's largest trading partner for 11 consecutive years. Sino-Japanese bilateral trade volume in 1972 was 10.4 billion U.S. dollars. For the first time more than 100 billion U.S. dollars of Sino-Japanese bilateral trade volume in 1981, and exceeded 100 billion U.S in 2002, and increased to 168 billion U.S. dollars (Japan statistics)in 2004. And reached 184.444 billion U.S. dollars in 2005, was 117.4 times of it in 1972. Japan is China's third largest source of foreign investment country now.This paper discusses and analyzes the Japanese direct investment in China and Japan's direct investment in China on Sino-Japanese trade. Analysis concluded that Japan's direct investment in the Sino-Japanese trade, mainly affecting mainly the substitution effect and complementary effect. Analysis concluded that Japan's^ direct investment in Japan's exports to China and China's exports to Japan are long-term relationship exists.Japan's direct investment in China on Sino-Japanese trade, the substitution effect is not obvious, more of the performance between the two are mutually complementary relationship. The two are interactive and mutually reinforcing relationship.The development of Japan's direct investment and Sino-Japanese trade is very similar. Japan's direct investment have greater volatility. There is complementarity relations between Japan's direct investment and Sino-Japanese trade. Japanese foreign direct investment during the same time, from domestic and other imported raw materials and intermediate goods, thereby increasing the total exports to China. Japanese foreign companies in China, most products are produced is an intermediate product. The direct effect is Japan's direct investment enterprises in Japan and third country exports has increased. To the end of the 20th century 80's, this model of vertical division of labor among industries have changed, our share of manufactured exports to Japan has been a larger increase, while China's exports of raw commodities share continues to drop. The early 20th century 90's, Sino-Japanese trade structure has undergone significant changes, China's exports to Japan of the upgraded structure, begun to enter the products the dominant pattern of commodity exports. The 21st century, China's accession to the WTO, China's exports to Japan to further upgrade the product structure, while Japanese exports to China of the vertical inter-industry trade has also gradually reduced at the same time, Sino-Japanese trade structure has been demonstrating the level of division of labor-based intra-industry trade in characteristics. Sino-Japanese trade in Japan under the influence of direct investment in China, also emerged from the inter-industry trade model to intra-industry trade patterns shift characteristics.This paper is divided into five parts,On Japan's direct investment and the impact on Sino-Japanese trade,carried out a preliminary analysis and research. The main contents are:Partâ… :Introduction.Research focuses on the background and significance, purpose of the study and methods, describes related research at home and abroad overview Study of the basic ideas and main content.Partâ…¡:International Direct Investment on international trade. From a detailed analysis of the theory of international direct investment on international trade impact analysis. International direct investment is mainly divided into the total impact on international trade analysis and international direct investment, the impact of international trade structure analysis of two aspects for analysis. Direct investment in the total impact on international trade are mainly investment substitution effect of trade and investment in complementary effects on trade. Substitution effect of trade investments mature theory is Mundell's theory, Mundell analysis in alternative trade model, the introduction of tariffs lead to investment in further analysis of investment substitution effect on trade. However, the international direct investment is not a complete alternative to international trade. With the vigorous development of economic globalization, the further investment is not only just a substitute for trade, investment and other effects on trade are becoming increasingly evident. Complementary effects on trade, investment mainly for investment in the trade creation effect as well as other investments in complementary effect of trade. Investment creation effects in the main theory is that trade creation theory, Kiyoshi Kojima, Kojima reach a conclusion that international direct investment in home and host countries, so that trade between the scale for the home and host countries to create more trade opportunities, thus promoting the host country's exports.In addition, there are a series of such as international direct investment will enable local businesses to imitate the export-oriented foreign affiliates production processes and techniques, hiring trained employees, while they are generated by the external spillover effects, etc.. And the international direct investment on international trade structure of the major changes in the international direct investment, international trade patterns and composition, and the international direct investment, optimize the structure of international trade, and international direct investment to a certain extent, affect the structure of international trade geography.Part III:Japan's direct investment in the Sino-Japanese trade volume effects. This part, mainly from Japan's direct investment and the present situation of Sino-Japanese trade, the post-war Japan's direct investment is divided into six stages of development. In the six stages, the Japanese direct investment in China has experienced three times the peak. After 2006, Japan's direct investment in experienced rapid growth, there has dropped significantly. At the same time, in the Sino-Japanese trade in the historical process, we can put Sino-Japanese trade is divided into three stages. By Japan's direct investment and the status quo of Sino-Japanese trade, comparative analysis, we can see that Japan's direct investment in the Sino-Japanese trade volume of the substitution effect and Japanese direct investment in China on Sino-Japanese trade volume of the complementary effect.Part IV:Japan's direct investment in the Sino-Japanese trade structure. Analysis of Japan's direct investment in the industrial structure and location structure, and structural characteristics of the Sino-Japanese trade shows that Japan's direct investment to change the pattern of Sino-Japanese trade and composition, and the optimization of the Sino-Japanese trade structure. Japan's direct investment in China is not only optimizing China's export structure, and optimize the structure of imports from China to Japan.Part V:Promotion of the Sino-Japanese trade under the influence of the Japan's direct investment. Based on the two chapters of analysis, Learn from the past state of Japanese direct investment in China and Sino-Japanese trade problems. Proposed to promote the Sino-Japanese trade under the influence of the Japan's direct investment. Finally, looking to the future of the Sino-Japanese trade under the influence of the Japan's direct investment.