A Study On The Trade Effects Of China's Direct Investment To ASEAN

As the world 's second largest economy,China' s economic behavior has attracted the world 's attention,its foreign trade and foreign investment constitute an important part of the world economy.As a friendly neighbor of China,ASEAN is an important choice for China's foreign trade and direct investment.Since the establishment of the CAFTA Free Trade Area in 2010,China and ASEAN countries have lowered their trade barriers and gradually abolished tariffs.This has resulted in increased openness of bilateral exchanges,closer bilateral relations and growing bilateral trade volume.In 2011,China became the largest trading partner of ASEAN.As a result of geographical proximity,China and ASEAN have some similarities in resources,economic structure,and so on.And these similarities make the two sides in greater trade competition,however ASEAN countries' advantages in resources,markets,etc.have complementary with China,how to use these advantages is the key to economic communication of China and ASEAN countries.In recent years,China's foreign investment has attracted the attention of the world,China's investment in ASEAN countries has also been growing.This growth trend makes people realize whether the investment behavior can lead to the expansion of trade in order to ease trade competitive of China and ASEAN and improve China's economic growth.Thus,how to use investment to promote the growth of China's trade with ASEAN is the hot subject of scholars to study.Researches of trade effects are many,but in the end,is there the trade substitution effect or trade creation effect or the combination of the two-the mixed effect,the views of different scholars vary,each person has its own theoretical basis.This paper first analyzes the theoretical basis of the research content of the article.Mainly based on two theories as a research basis,one is the investment theory,the other is the trade mechanism of the relevant mechanism.For the first theory,mainly from the developed and developing countries to carry out the two entry points;and on trade effects,there are three main points of view,namely,trade substitution,trade complementary,and mixed effect.Next,it analyzes the basic situation of China's direct investment to ASEAN with the combination of theory and practice,and discusses the general characteristics of China's direct investment to ASEAN,the investment motive and the problems in the process of investment to ASEAN countries.Then,this paper uses the economic data from 2004 to 2015 and uses the panel data model to carry out the multiple regression analysis to study the trade effect of China's FDI to the ten ASEAN countries.The results show that China's direct investment in ASEAN has a role in promoting imports and exports,creating an effect for trade,but the size of this creative effect varies from country to country;Finally,based on the relevant issues raised above and the research results,it makes appropriate policy recommendations to promote China's investment in ASEAN countries,so that Chinese enterprises can invest in the right behavior,and properly handle the investment risks.