The Impact Of US Direct Investment On Sino-US Trade Imbalances

Since 1990,with the rapid development of economic globalization ,globaleconomic pattern has made profound changes, Especially Since China joined theWorld Trade Organization, the growth in the process of merging into theglobalization ,China's sustained economic growth had become the focus of the world.Meanwhile, Sino-US trade relations had become the most important bilateralrelationship in the global economic system because rapid expansion of bilateral tradesize made China and US the double engines of stimulating global economic growth.However,Sino-US trade relations showed severe imbalances in the past decade. Theimbalances in the trade field presented greatly as the worsening of the bilateral tradeimbalance,namely China's trade surplus with America continued to expand. Accordingto China's statistics, in 2001 China's trade surplus with us was $28.08 billion and$202.34billion in 2011, with an average annual growth rate of 29%. According to thestatistics of the US department of commerce, US trade deficit with China was $83.83billion in 2000, for the first time China became the biggest source country of tradedeficit instead of Japan. Although the bilateral trade imbalance was an indisputablefact, on the reasons that caused China's trade surplus with the us became so large,there were great differences between the academic circles and politicians in these twocountries. Therefore, reasons that caused the bilateral trade imbalance had been one ofthe focus problems that academic circles and politicians in these two countries paidattention to. Domestic scholars and part of American scholars hold the opinion that thegrowing America's trade deficit with China was the affection that multinationalcompany, especially the rapidly increasing American multinational company's directinvestment in China had made on bilateral trade in both scale and structure, whichmade the problem of trade imbalance more complicated. Therefore, to makepenetrating research on the impact of the US direct investment in China on Sino-US trade imbalances, from the perspective of foreign direct investment's trade promotioneffect to reveal the fundamental reasons that cause bilateral trade imbalance,couldfurther promote the research on Sino-US trade relations, provide the theory basis andthe decision reference for Chinese government to adjust the foreign capital policy andeconomic development strategy, also enhance our status in negotiations about bilateralrelations between the Chinese government and the US government.The dissertation contains 7 chapters. Chapter 1 was the introduction. This chaptermainly presented the selected topic background and the research significance,onwhich basis conducted the correlation literature survey research,then furtherdiscussion of this paper's logical structure and main method of the research , andpointed out the innovation and deficiencies.Chapter 2 was trade effects of international direct investment :a theoretic analysisframework.This chapter went over the relevant theories of FDI's trade effects inventedby the precursors,and based on it constructed a theoretical framework of the impact ofUS foreign direct investment in China on Sino-US bilateral trade under differentinvestment motivations and different investment industries.Chapter 3 were the main characteristics of US direct investment in China. Thischapter gave a description of the main characteristics of US direct investment inChina,including stage characteristics, motivation characteristics and industrycharacteristics. According to scale changes of US direct investment in China,US directinvestment in China were divided into three stages:initial stage,high developmentstage and adjustment stage; According to the different impacts of US direct investmentin China in different stages on China's foreign trade,development of US directinvestment in China could also be divided into two stages: entering stage and runningstage of US multinational corporations. According to the different motivations of USdirect investment in China, multinational corporations conducting US directinvestment in China included market-oriented type and production-oriented type.Inaddition, US direct investment in China formed distinct characteristics:concentratingon the investments in manufacturing industry, strengthening the investments in energy industry,and speeding up the investments in services.This chapter summed up theinvestment motivation and industry characteristics of US direct investment inChina ,to lay the foundation for later analysis.Chapter 4 was Sino-US trade imbalances.This chapter Mainly summed up thethree aspects in Sino-US trade imbalances,personally there were three aspects inSino-US trade imbalances: China's trade surplus with the US,the Sino-us tradestructure imbalance and the asymmetry between US export competitiveness andChinese export competitiveness.China's trade surplus with the US intuitivelypresented the phenomenon of Sino-US trade imbalances,but not fully representedSino-US trade imbalances, it only reflected one aspect of Sino-US trade imbalances,namely the scale imbalance of the Sino-us trade, however , behind China's tradesurplus with the US were two more complicated aspects of Sino-US trade imbalances,Sino-US bilateral trade structure imbalance and asymmetry between China and US onexport competitiveness. Sino-us bilateral trade structure imbalance mainly embodiedin China's work-intensive goods export surplus with US was much more thanAmerica's skill-intensive goods export surplus with China. In addition, stark contrastin the export competitiveness between China and US commodity trade and servicestrade, also embodied the third aspect in Sino-US trade imbalances, namely theasymmetry between US export competitiveness and China export competitiveness.This mainly embodied in China's export competitiveness was much more than US, butservices export competitiveness was much less than US.This chapter summed up thethree aspects in Sino-US trade imbalances, to lay the foundation for later analysis.Chapter 5 was the analysis to the impact of US direct investment in China's onSino-US trade imbalances.This chapter mainly analyzed the impact of US directinvestment in China's on Sino-US trade imbalances, through the analysis andcomparison of the US direct investment on Sino-US trade size, Sino-US tradestructure, Sino-US commodity trade structure, and between China's exportcompetitiveness and US export competitiveness, to find US direct investment in Chinaamplifies China's trade surplus with the U.S, exacerbated the Sino-US trade structure imbalance, but abated the Sino-US commodity trade structure imbalance and theasymmetry between Chinese commodity export competitiveness and US commodityexport competitiveness.Chapter 6 were the main conclusions and policy recommendations.