A Study on the Trade Effects of China's Direct Investment in Malaysia

Abstract

Malaysia is geographically located in the center of Southeast Asia, holding the Malacca Strait, an important international waterway, and is an important node in the construction of the "Belt and Road". China and Malaysia have long maintained good economic and trade cooperation. Investment and trade are important ways of economic exchanges between the two countries. Malaysia has a favorable investment environment, and China has become the largest investor in Malaysia's manufacturing industry for six consecutive years. In terms of trade, China has become the largest trading partner of Malaysia for 14 consecutive years, the largest source of imports and the second largest export market of Malaysia. As an important investor and trade partner of China, Malaysia's research on the trade effects of direct investment in Malaysia can further promote bilateral economic cooperation and provide reference for China's investment in other countries along the "Belt and Road". Firstly, the paper defines the main concepts involved, and combs the relevant theories of trade effects of direct investment, which lays a theoretical foundation for the following research. Then, the paper analyzes the development of China's direct investment and trade in Malaysia, introduces the general situation of China's direct investment and trade in Malaysia, and preliminarily judges that China's direct investment and trade in Malaysia are promoting relations. Finally, the paper combines the status quo analysis and empirical conclusions, and puts forward relevant policy recommendations.