On the Relationship Between Overseas Direct Investment and Trade

Theoretically, there are complementarities and substitutions between overseas direct investment and international trade, depending on the motivation, types, and development periods of overseas investment of parent countries (or multinational corporations). We reviewed the practice of both developed and developing countries in this area, and analyzed China's overseas investment and trade exports, looking especially at the differences in industrial sectors. The impact of overseas investment on foreign trade varies among these sectors, and currently the government should strengthen its policies for encouraging overseas investment and trade creation.