The Analysis On The Trade Effect Of Chins's FDI To Asia

The China's direct investment in Asian countries (regions) had resulted in different effects on the trade between China and Asian countries (regions). Under the circumstances of flourishing development of China's outward direct investment in Aisa and trade between China and Asian countries (regions), the effects are studied in this paper. This paper firstly reviews and summarizes both the domestic and foreign research theories of this issue, and describes the current situation, features and interact of investment and trade between our country and Asian countries(regions). Then from the theory perspective, it analyses the different effects of China's direct investments in Asia due to their variation in motivation, industry, and investment type. The next part of this paper, we choose the gravitation model studing the effects by using 2003——2008 panel data of 31 Asian countries (regions). This positive analysis results show that China's direct investment in Asia has complementary effect on the trade no matter the export or import.What's more, the effect in different countries (regions) is different. Finally, based on what are discussed in the above sections, this paper gives some suggestions on the further development of direct investment by China in other Asian countries (regions).