Abstract:

The local content requirement is a policy which is forbidden by WTO and related measures of trade investment. Fundamentally, it will reduce foreign direct investment and trade. But its influence on local industry and foreign direct investors is the focus of argument. Based on the difference of industry structure and labor wage, this paper's major conclusion is: the local content requirement will strengthen local industry development, and reduce consumers' remainder, but its influence on local government is still unidentified. At the same time, the local content requirement will reduce a transnational company's profit.

Key words: WTO, related measures of trade investment, the local content requirement