The Impact Of Outward Foreign Direct Investment On Export In China

With the deepening of global economic integration,outward foreign direct investment and export trade have become important driving forces for national economic development.Since the beginning of the 21 st century,with the accelerating pace of China's "reform and opening up" and "going out" and the "One Belt,One Road",China's foreign direct investment has developed rapidly.In 2017,China has become the world's third largest foreign investor.However,the world's political and economic structure is constantly changing,with the increasing friction of international trade,the development of China's foreign trade is facing severe challenges.Meanwhile,the Chinese economy has begun to enter a new normal stage,we need to accomplish the transformation and upgrading of the trade structure to balance the export trade and OFDI.This paper attempts to research the question above from the perspective of country differences to provide a reference to make China's export-oriented economy better and the formulation of national economic and trade policies in the new era.This paper firstly divides the relevant theories on the relationship between ofdi and export trade into three categories,namely,substitution,complementary and uncertain relation.From the perspective of investment motivation,this paper elaborates the mechanism by which ofdi affects the export scale of the home country.It found that differences in investment motives lead to differences in impact.Then,it selects China as the mother country of investment and summarizes the development process,overall situation and industry distribution characteristics of China's OFDI.And according to the size and resources endowment difference,the foreign countries are divided into three categories: developed economy,the resources-rich countries and emerging economies &other developing countries.It analyze several typical countries each category and found that China's motivation are different when invest on different type of country,which leads to different effect on export.Based on the expanded trade gravity model,this paper empirically analyzes the impact of China's OFDI on exports by using fixed effect panel data regression.84 different countries and regions from 2006 to 2017 were selected.The results of the full sample regression show that China's OFDI has a significant role in promoting exports.The 84 countries and regions are divided into developed economies,resource-rich countries,emerging economies & other developing countries.The results show that China's direct investment in resource-rich countries,emerging economies and developing countries has a significant role in promoting exports.Direct investment in developed economies has an insignificant substitution effect on exports.Finally,this paper proposes policy recommendations.In order to promote the development of export trade and OFDI,China should strengthen the effective guidance of the government and promote the rational development of OFDI structure.At the same time,it should pay attention to investment motives and let OFDI promote the export;encourage technological innovation to support the development of OFDI and export trade.