Research On The Trade Effect Of China's Direct Investment In Vietnam

Since the normalization of vietnam-china relations in 1991,bilateral trade has developed rapidly.China is Vietnam's largest source of imports and an important export destination.In 2017,China became Vietnam's largest export market,and the two countries are important trading partners.Since the 21st century,China's direct investment in Vietnam has developed rapidly,and in 2017 it became Vietnam's 4th largest FDI source country.While achieving remarkable results,bilateral economic and trade relations are also confronted with such problems as trade imbalance,underutilization of investment potential,diminishing marginal growth rate of trade and investment,and sustainability of economic and trade relations.On the basis of literature review and theoretical review,this paper makes a statistical analysis of the total amount,structure and regional distribution of FDI in Vietnam,as well as the changes in the total amount and structure of vietnam-china trade,and also analyzes the overall introduction of FDI and foreign trade in Vietnam.Then,using China's FDI data and bilateral trade data,the empirical test of FDI trade effect was conducted.At the same time,the regression test was conducted on the total import FDI and total import and export trade data of Vietnam as a comparison to further clarify the trade effect of China's FDI in Vietnam.After theoretical analysis,statistical analysis and empirical test,the conclusions are as follows:first,the growth of China's export to Vietnam is the reason for the growth of China's FDI in Vietnam;The growth of China's FDI in Vietnam is the reason for the growth of Vietnam's export to China.Secondly,China's FDI growth in Vietnam has no significant impact on China's export to Vietnam.FDI from third parties(Korea,Japan,Taiwan,etc.)is the important reason for China's export growth to Vietnam and its trade deficit with Vietnam.Third,FDI from various parties including China to Vietnam has expanded Vietnam's exports to third-party markets(the US and Europe),including the growth of its exports to China.Fourthly,the FDI from all parties,including China,towards Vietnam is characterized by vertical and compound FDI,which has the effect of expanding two-way trade of import and export,and makes Vietnam have the trend of becoming a regional value chain manufacturing base.Based on the above conclusions,this paper puts forward some policy suggestions for Vietnam to further expand and optimize the introduction of FDI from China and realize the sustainable development of bilateral trade and investment in view of the problems in vietnam-china economic and trade cooperation,the uncertainty of economic globalization process and the possible obstacles facing Vietnam's export to the US and European markets.Under the conditions of value chain division and regional integration,the study of FDI's trade effect should not be limited to bilateral trade effect,but should be extended to the third country trade effect,which is the main innovation point of this paper.