Research On The Trade Effects Of China’s Outward Forrign Direct Investment In RCEP Countries And Influence Mechanism

The Regional Comprehensive Economic Partnership Agreement(RCEP)is a trade agreement initiated by the ten ASEAN countries and jointly signed by China,Japan,South Korea,Australia,and New Zealand.It currently covers the widest region and involves nearly one-third of the global economy.Since its inception,the agreement has been widely concerned by countries around the world.After eight years of 31 rounds of negotiations,the agreement was successfully signed on November 15,2020,and officially entered into force on January 1,2022.The official signing of RCEP not only brings new development opportunities for China’s foreign investment and international trade,but also means that China will have closer economic ties and more frequent trade exchanges with RCEP member countries.Standing at a new stage of development,it is of new significance to re-examine the relationship between foreign direct investment and trade promotion under the new situation of the entry into force of the RCEP agreement.This article takes RCEP as the research object,based on investment and trade theory,and uses a trade gravity model to study the trade effects of China’s direct investment in RCEP member countries.The research idea of this article is roughly divided into the following steps: Step 1:Using the OFDI traffic data from the "China Foreign Investment Statistics Bulletin" over the years and the latest bilateral total trade flow decomposition data calculated by the Global Value Chain Research Institute of the University of International Business and Economics,construct relevant research variables based on the trade gravity model.Then,we use OLS and quantile regression to empirically analyze the impact of China’s OFDI on intermediate and final goods trade and its impact differences,and draw preliminary research conclusions.The second step is to test the robustness of the preliminary research conclusions by adding lag terms,replacing explanatory variables,and dividing time period regression,and finally draw robust and reliable empirical research conclusions.The third step is to propose two possible mechanisms for OFDI to generate trade effects based on existing literature and theories,namely,improving the quality of host country institutions and alleviating resource constraints in the home country,and to verify the rationality of the existence of the mechanism through empirical methods.Finally,considering the differences in the level of economic development among RCEP countries and the scale of acceptance of China’s OFDI,there may also be differences in the effects of China’s OFDI on their trade.Therefore,this article conducts a heterogeneity analysis at the national and industrial levels.The research significance of this article has considerable theoretical and practical significance.On the one hand,it broadens the perspective of research on RCEP trade effects and enriches relevant literature.On the other hand,the development prospects of investment in RCEP member countries are good,coupled with differences in development levels among countries.Analyzing the impact of foreign direct investment on import and export trade can help adjust trade strategies and development routes in a timely manner,enhance the timeliness and pertinence of investment,and provide a certain reference for expanding trade scale and optimizing trade structure.It has important practical significance in promoting the further implementation of the Agreement and promoting the formation of a more proactive,inclusive,and win-win regional economic cooperation strategy among member countries.Based on the above research,the research conclusion of this article is that OFDI has effectively expanded China’s imports and exports to RCEP member countries,and the import effect is stronger than the export effect.Specifically,for intermediate and final products,it is found that the export effect of OFDI on intermediate products is greater than that of final products,while the import effect is the opposite.In addition,as the bilateral trade volume increases,the promotion effect of OFDI on imports and exports will decrease.The conclusions of the empirical analysis are as follows:(1)From the perspective of total trade,intermediate trade,and final product trade,OFDI has a significant positive impact on imports and exports.(2)The positive impact of OFDI on imports and exports may be achieved through two channels-improving the quality of host country systems and mitigating resource constraints in the home country.(3)OFDI helps to expand China’s imports to low-and middle-income countries,as well as its import and export trade with high-income countries.However,the export creation effect on RCEP low-and middle-income countries is not significant at the overall export level.(4)OFDI has significant import and export creation effects on China’s three major industries.However,the magnitude of the effect varies between industries.Based on the above research conclusions,this article proposes three policy recommendations: First,deepen the construction of RCEP,increase investment in member countries,and stimulate the scale of imports and exports.Second,deepen green cooperation and promote resource seeking investment.Third,strengthen planning guidance and explore development paths by "tailoring".