The Research Of Foreign Direct Investment Impact On Sino-US Trade

With the continuous development of the trend of economic globalization, theinternational direct investment continues to deepen, the investment amount and theinvestment scale are expanding，all those factors have had a tremendous impact onthe entire world economy. At the same time, due to the good investment environmentcoupled with the deepening of reform and opening up in China, the investment offoreign-funded enterprises in China is expanding rapidly. Since the reform andopening up, China’s foreign direct investment increased year by year, the amount offoreign direct investment in China has been in the lead position in developingcountries. At the same time, China’s foreign trade also continue to develop, Chinahave established a very close trade relations with many countries in the world. Chinatake advantage of her low cost and abundant resources which make herself always bein the trade surplus, a huge trade surplus has also brought a series of problems, inparticular, the Sino-US trade imbalance. United States of China’s huge trade deficitmade The United States begin to implement a series of measures to put pressure onthe RMB exchange rate, and the anti-dumping on Chinese products.However, if wemake a careful analysis of the current global economic situation and Sino-US tradeconstitution, we will not difficult to find that the issue is not just trade issues ofSino-US trade imbalance, but closely related to foreign direct investment in China,foreign direct investment should be the main force of China’s exports. So the studyof foreign direct investment in China has an important significance to the mitigationof the Sino-US trade imbalance and the optimization of the structure of foreign direct investment in ChinaFirst, the paper have a review of foreign direct investment and internationaltrade theory and research, which is the basis of my study. Then the paper make aintroduction of the development of Sino-US trade and foreign direct investment inChina and then their characteristics, there are a lot of charts and data in my paper,which make it more intuitive to reflect the characteristics of the development ofSino-US trade and foreign direct investment in China as well as easier to find therelationship that exists between the two counties. After making systems analysis, thispaper empirically explore the impact of foreign direct investment in China onSino-US trade, infer that there existed a certain contact.Empirical research in this paper uses Eviews6.0measurement software toanalyze the relationship between foreign direct investment in China and Sino-UStrade imbalance, the paper also introduced the economic variables of China’s GDP inorder to make the results more accurate. In the empirical analysis part, I usecointegration analysis and error correction model to analyze the impact of foreigndirect investment in China on Sino-US trade imbalance, and then use the Grangercausality test to analyze the causal relationship between the two countries. Theanalysis results show that in the long term, foreign direct investment in China,China’s import and export trade of the United States have a larger impact on exportsthan imports, which result the Sino-US trade imbalance; in the short term, however,foreign direct investment in China have a small impact on the import and exporttrade between China and United States. Finally, the paper predicts the trend ofSino-US trade imbalance, and to make policy recommendations for the foreign directinvestment in China and Sino-US trade base on the analysis.