Assessment of the Impact of Green Foreign Direct Investment on Foreign Trade of the Country (on the Example of China)

This paper analyses China's foreign direct investment (FDI) and its impact on foreign trade. For China, FDI has always been one of the main factors in the development of the economy, social sphere, and trade. However, the active development of the economy under the influence of FDI led to negative consequences for the environment. Therefore, now China is interested in attracting green FDI directed to sectors of the economy that contribute to improving the environmental situation in the country. FDI is one of the key factors in the development of China's economy and foreign trade, at the same time, China is increasingly giving preference to green development, the purpose of this study is to assess the relationship between green FDI and foreign trade indicators in China. The designated goal defines the following research objectives: to assess the dynamics, volumes and characteristics of incoming / outgoing green FDI in China; Analyse the correlation between China's green FDI and export / import rates. The study attempts to assess the relationship between the green component of FDI and foreign trade indicators using the example of the industrial sector (as one of the main directions of green FDI in China). After analysing the scientific articles of the authors of the last century and modern researchers, we can conclude that there is a correlation between foreign direct investment and the development of foreign trade. Also, researchers now argue that FDI is more likely to have an impact on foreign trade than vice versa. However, in this study, both the Green FDI - Export link and the Green FDI - Import link were found to have a negative Pearson coefficient. This suggests that the relationship between green FDI in the industrial sector and the development of foreign trade in industrial goods is negative. Based on the results of the work, the following recommendations can be distinguished to improve foreign trade and attract FDI for China, especially during the recovery period after COVID-2019: revising the role of the government and reducing the trade balance; transforming the structure of exports through innovative development, modernizing the manufacturing industry and improving the position in the global value chain; training new staff and reserves in the development of green FDI; improving trade protection policies in China; promoting cross-border e-commerce facilities and technologies; and accelerating the expansion of globally diversified logistics systems. The topic of the relationship between green FDI and the development of China's foreign trade is little studied to date, which provides a great perspective and opportunities for further analysis.