Proper

Abstract

Under the competitive advantage of labor costs, China’s export volume has experienced historical growth, reflecting its multiple participation in the manufacturing system. Since China’s reform and opening policy, foreign investment has spiraled. Pervasive processing trade in high-sophistication industries make measure of gross export confusing and further disable attempt to interpret accurate picture of trade. Additionally, foreign investment’s critical role is generally acknowledged as the incentivizing essentials of transforming trade and structure of industry. This research attempts to exam distinctive characteristics of trade, the relationship China’s domestic value added in export with average employment, working capital, share of foreign equities and average salary, accumulated depreciation and total capital. We adopted the OLS analysis for hypothesis testing. The empirical results implied that average employment, working capital, share of foreign equities and average salary has statistically significant positive effect on domestic value added. However, the accumulated depreciation and total capital has negatively effect on domestic valued added in export of China.