Study On The Trade Effect Of China’s Direct Investment In Malaysia

At present,with the development of economic globalization,regional cooperation has become an important trend in the development of the world economy.Under such an era,China has proposed the “Belt and Road Initiative” to promote the common development of China and neighboring countries win-win.As an important node country of the Maritime Silk Road,Malaysia connects the Pacific Ocean with the Indian Ocean,and connects North and South Asia with Oceania.It has obvious geographical advantages.China and Malaysia have a high degree of economic and trade reliance and a large scale of bilateral economic and trade cooperation.China’s investment in Malaysia and the scale of bilateral trade have shown a rapid growth trend.At present,the bilateral trade volume between China and Malaysia is basically stable at around$100 billion.China’s investment in Malaysia has also shown rapid growth.In 2013,China’s direct investment in Malaysia was $1.6 billion,and in2017 it reached $4.9 billion,an increase of three.More than one.In 2018,Mahathir visited China in August after successfully winning the general election.He highly praised the achievements of bilateral economic and trade development between China and Malaysia.He expressed the hope that the opportunity of “One Belt,One Road” will be further promoted to promote China and Malaysia.The development of bilateral economic and trade relations has broadened the scope of bilateral trade and welcomes more Chinese companies to invest in Malaysia.Based on the theory of foreign direct investment trade effect,this paper studies China’s investment in Malaysia and its trade effects.Firstly,it analyzes the direct investment process of Malaysia,the motivation of investment and the factors affecting China’s direct investment in Malaysia.The status quo,characteristics and main problems of bilateral trade were analyzed.Finally,based on the data of China’s direct investment in Malaysia and import and export trade in the period of 2003-2017,thegravitation model was used to analyze the trade effect of China’s direct investment in Malaysia.Finally,based on the data of China’s direct investment in Malaysia and import and export trade in the period of2003-2017,the gravitation model was used to analyze the trade effect of China’s direct investment in Malaysia.According to the results of the empirical test,China’s direct investment in Malaysia has a clear complementary relationship with China-Malaysia bilateral trade.China’s investment in Malaysia has created trade effects on bilateral trade between China and Malaysia.Therefore,in the context of the “Belt and Road”,China should further enhance China’s direct investment in Malaysia and promote the healthy and sustainable development of bilateral trade between China and Malaysia.