| Foreign direct investment and international trade are two important ways for a country’s economic development. With the implementation of the "going out" strategy,China’s FDI has gained a rapid growth and become an important driving force for China’s economic development. Five Central Asian countries are China’s important investment and trade partners, at the same time, the Belt and Road Initiative has brought new opportunities to the direct investment and economic cooperation between China and Central Asian countries. In this context, this paper studies the trade effect of China’s FDI in the five Central Asian countries, combined with theoretical analysis and empirical analysis,explores the impact on bilateral trade volume in two levels, so as to provide feasible suggestions to make better use of FDI to promote trade development and enrich the relevant investment theory for the Belt and Road Initiative.In the theoretical analysis, this paper reviews the correlation theory of FDI and trade.Based on the study of the classical theory, it analyzes the mechanisms how the FDI influence the import and export trade, and summarizes the factors which influence the trade effect of FDI. Then, it compares the current situation of China’s FDI and trade in the five Central Asian countries in two aspects of the scale and structure, judged by theory that the trade effects of China’s direct investment in five Central Asian countries is creative.In the empirical analysis, it makes a empirical test to check up the trade effects of FDI in integral and individual two levels. When the overall regression, using the extended gravity model and the method of gradual introduction of variable to conduct a panel data regression. When doing the country return, using the method of time series analysis.Through empirical research, this paper mainly draws the following conclusions. Firstly,China’s FDI in the five Central Asian countries has significant trade creation effect on the whole, mainly because of China’s FDI in the five Central Asian countries is resources obtaining investments and market expansion investments. Secondly, with respect to the FDI flows, the trade effects of FDI stock is more obvious. Finally, the trade effects of China’s FDI in the five Central Asian countries have obvious differences between countries. For export creation effect, the strength of trade effects in the five Central Asian countries is arranged in Tajikistan, Uzbekistan, Kyrgyzstan, Kazakhstan and Turkmenistan. For importcreation effect, the strength of trade effects is arranged in Turkmenistan Tajikistan,Uzbekistan and Kazakhstan. In addition, China’s FDI in Kyrgyzstan has import substitution effect but the test results are not significant.Based on the research results, this paper argues that China should increase the direct investment in the five Central Asian countries on the basis of improving the level of investment and trade facilitation, and adjust the industrial structure of FDI. At the same time, pay attention to the guiding role of the government in the course of adjusting FDI,and improve enterprise’s own ability, in order to promote the investment and bilateral trade between China and the five Central Asian countries. |
