FDI To China’s International Trade Impact Analysis
ABSTRACT
International trade and direct investment have played more and more important role in the world economy system. In 1930’s, someone had raised the point that "Trade is the engine of economic growth"; and in 1990’s, the point of view "corporations are the engine of economic growth" was also raised. Since 1990’s, one of the important feature of the world economy is the growth of international trade has developed faster than production, and the growth of international direct investment has developed faster than the growth of international trade. Therefore, the international trade and foreign direct investment has played a notable role in the world economy. International trade and foreign direct investment are the result of goods and factors production flow in the world and the relationship between them are much closed.
The relationship between international trade and direct investment in
the different historical periods has different manifestations. The development of International trade is earlier than direct investment, which performance the role as the pilot of direct investment. That is to say in a certain extent, direct investment gradually replace the role of the international trade. Meanwhile, the development of direct investment will promote the development of international trade, which reflects a complementary relationship between them. In short, the relationship between international trade and direct investment can be expressed as promote positive for relations, but also can be expressed as an alternative to the negative relationship.
KEYWORDS: foreign direct investment，International trade
