A Comparative Analysis Of The Impact Of US And Japan 's FDI On China' S Bilateral Intra - Industry Trade

As the bilateral trade between China and its major trading partners, the US, Japan and Germany, growing continuously, the share of China’s intra-industry trade with them rose year by year. Based on HS6-digit product data, this paper analyzes the level of Sino-US, Sino-Japanese and Sino-German bilateral intra-industry trade. The results show that the bilateral intra-industry trade level of Sino-Japanese is highest, while that of Sino-US is lowest. Furthermore, this paper examines the influence of the US’, Japan’s and Germany’s FDI on bilateral intra-industry trade, by using cointegration analysis and panel data model from country level and industry level respectively. The empirical results show that Japan’s FDI played a significant role in promoting the Sino-Japanese bilateral intra-industry trade, while neither of US’s or Germany’s FDI.