Study On The Relationship Between U.S. Direct Investment In China And The Export Structure Of China To U.S.

The United States (U.S.) is one of China's important FDI source countries and trade partners. After the reform of China, both of U.S. direct investment in China and Sino-U.S. trade has been growing rapidly. In 2005, the realized value of U.S. direct investment in China was $3.061 billion which was 155 times that of 1980. At the same time, the value of Sino-U.S. bilateral trade amounted to $211.626 billion which increased nearly 213 times compared to $0.99 billion in 1978. Meanwhile, the export structure of China to U.S. has been optimizing constantly. On one hand, in 2005, the ratio of the export value of manufactured products and primary products in total exports to U.S. was 97:3. On the other hand, in 2003, among the manufactured products China exports to U.S.,the export of capital and technology intensive products preponderated over the export of labor intensive products. There has been a growing literature on the relationship between U.S. direct investment in China and Sino-U.S. trade, while limited studies are on effects of U.S. direct investment on the commodity structure between these two countries. To close up the gap, the paper investigates the inner relationship between U.S. direct investment in China and the export structure of China to U.S..This paper firstly expounds the theoretic basis of the relationship between U.S. direct investment in China and the export structure of China to U.S.. Then the paper studies the structural characteristics of U.S. direct investment in China and the characteristics of the export structure of China to U.S. according to a large number of data. It is found that there exists correlation between these two items.Thirdly, the paper analyzes the relationship between U.S. direct investment in China and the export structure of China to U.S. by means of cointegration test and error correction model. At first, the paper takes the export structure of China to U.S. as a whole and links to U.S. direct investment in China directly. Then, the paper discusses the relationship between U.S. direct investment in China and the value of export of primary products, manufactured products, labor intensive products, capital and technology intensive products, low technology manufactures, medium technology manufactures, high technology manufactures respectively. The results show that U.S. direct investment has played a significant role in improving the export structure of China to U.S. . Then the paper discusses the way of U.S. direct investment affect the export structure of China to U.S.. It is found that the American investment enterprises have improved the export structure of themselves to U.S. by exporting more capital and technology intensive products. It is also found that U.S. direct investment has improved the export structure indirectly by"technology spillovers", and the coefficient of it is about 0.41.Finally, the paper analyzes the problems on the processes of U.S. direct investment improving the export structure of China to U.S., and raises some corresponding suggestions.