Research On The Influence Of American Manufacturing Foreign Direct Investment In China On Sino-US Trade

With the development of economic globalization and international labor division,American manufacturing foreign direct investment in china and bilateral trade are booming.The relationship of Sino-US bilateral trade is more and more closer,especially after China joined WTO.America is the largest developed country while China is the largest developing country.Besides,America is the main source of foreign direct investment in china and our major exporter.The development of Sino-US bilateral trade plays a very important role in international economy and trade.Whether there is a relationship between American manufacturing foreign direct investment in china and Sino-US bilateral trade and how they affect each other are worth studying.This paper mainly focuses on the influence of American manufacturing foreign direct investment in China on Sino-US trade surplus,by using theoretical and empirical methods.Furthermore,taking main manufacturing industries as examples to analyze the different effects of different industries.Chapter 1 presents the background,significance and possible innovation of this research.Chapter 2 this paper sorts and reviews the relevant literature.In Chapter 3,the author analyzes the scale and structure features of American manufacturing foreign direct investment in China and Sino-US bilateral trade.The author comes to the conclusion that the scale of American manufacturing foreign direct investment in China is growing with a large fluctuation.The FDI focuses on electric and electronic equipment,chemicals and allied products,transportation equipment.Besides the surplus of Sino-US bilateral trade is large and the export focus on machinery,electric and electronic equipment.Chapter 4 is theoretical analysis.This chapter researches on the influence path and mechanism between FDI and bilateral trade.Chapter 5 is empirical analysis based on econometric model.From the results,we can see that if the proportion increases one percentage in FDI,the proportion will increase 0.87,0.94,0.73 and 1.06 percentage in total trade,export,import and trade surplus.There is strong positive correlation between FDI and bilateral trade in machinery,electric and electronic equipment,transportation equipment industries.And there is low correlation between FDI and bilateral trade in metals,food and chemicals industries.The main conclusion is in Chapter 6.American manufacturing foreign direct investment in China enlarges the surplus of Sino-US bilateral trade surplus and the correlation varies among different industries.