Trade Effect Analysis Of Chinese Manufacturing Industr’ys Foreign Direct Investment

With the integration of world economy, foreign direct investment (FDI) andoutward trade has become an important part of a country’s world economy. SinceChina approved policies that making reform and opening up, both foreign directinvestment and outward trade has made positive effect to China’s economic development.With the trend that the word economy is in great transition, how to coordinate thedevelopment of outward trade and foreign direct investment, how to promote their owneconomic development, and how to take better use of foreign direct investment,undoubtedly has become an significant task to our country’s economy.Manufacturing industry, as the national economy’s key apartment, playing adecisive role in the economy of our country, in the world economy based on thephenomenon of world integration, whether manufacture factories should " go out ", andhow to " go out", is an significant task to China’s current condition.This article first elaborates the classical theory of the relationship between foreigndirect investment and outward trade, According to the summary of traditional theory thathow does foreign direct investment effect the trade, applying the related theory analysisthe effect that manufacturing’s FDI made to import, export and industrial structure, then,the article makes a descriptive analysis of the manufacturing industry’s foreign directinvestment and outward trade characteristic, which lay foundation for the next empiricalresearch and the policy recommendations.Using the panel data, empirical part analyzes the effects manufacturing industry’sforeign direct investment make to the import and export volume, the differences betweenstate-owned and non state-owned outward investment; in the influence on themanufacturing structure level, the article analyzes the intra-industry trade index andproductive service industry. The results show that, on the whole, the foreign directinvestment industry make a strong trade creation effect, greatly promoted the export andimport, to state-owned enterprises, export effect is not so evident, import effect is moreprominent, non state-owned enterprise make great effect to import and export, which issame to the whole manufacture industry; on the industrial structure level, the effect toproductive service is evident, but the effect to intra-industry trade index is not so clear. Finally, according to the theoretical basis, the results of empirical research, theeffect foreign direct investment brings to outward trade, the article dig out thedisadvantages and limitations to outward development of manufacturing enterprises,propose the corresponding policies and recommendations from the angle of governmentand enterprise strategy.