The relationship between international trade and foreign direct investment has been become one of the most important issues among scholars’ researches. The majority of scholars made promoting effects of foreign direct investment in the export trade as their main research content, which focused on the relationship between foreign direct investment and trade effects in the host country to verify alternative or complementary effects. Recently, they have begun to regard the home country as the research object, with the latest trade gravity model to study the FDI’s effect in the home country’s import and export trade. This paper elaborates the theory of Chinese foreign direct investment and trade effects, which highlights China’s foreign direct investment of trade effects, influencing factors of these effects and their path mechanism. Followed by the performance of the gravity model, empirical test comes that the external direct investment contributes to trade creation and regional differences, and put forward policy suggestions accordingly.

Ⅰ. Introduction
Ⅱ. The empirical analysis on the trade effect of China’s foreign
direct investment
Ⅲ. The causes of China’s foreign direct investment trade effect and
the difference analysis between countries
Ⅳ. Policy recommendations for trade creation effect of China’s
foreign direct investment

• Zhang, Zongbin(Male, Doctoral Tutor， Economic School, Shandong Normal University)
• Xin, Jingjing(Female ,Doctoral Candidate, City School, Capital University of Economics and Business)
• Wu, Shuxin(Female, Postgraduate Student, Economic School, Shandong Normal University)