STUDY ON THE TRADE EFFECT OF CHINA'S DIRECT INVESTMENT IN MYANMAR
Keywords:
direct external investment, trade effect. linear regression model, investment.Abstract
China and Myanmar established diplomatic relations in 1950. The friendship between the two countries has a long history, and investment and trade cooperation is in good condition. China is Myanmar's largest trading partner and most important source of foreign investment. The article first summarizes and analyzes the state of direct investment and the overall level of bilateral trade. Secondly, based on the investment and trade data between China and Myanmar from 2006 to 2019, using the volume of imports and exports as the explanatory variables, the volume of China's direct investment in Myanmar as the explanatory variables, two unilinear regression models are constructed. Through empirical analysis, it is concluded that the trade effect of Chinese direct investment in Myanmar is additive, that is, direct investment promotes trade between two countries, and this additional effect of direct investment on trade between two countries has a greater impact on imports than on exports. Finally, based on the findings, appropriate countermeasures and suggestions are put forward.
