United States Direct Investment In China On Sino-us Trade Balance

With the prolongation of economic globalization, accelerating development of international labor division and also the great regulation of world industry structure, both American direct investment to China and bilateral trade between China and the United States have got the high speed growth and development. As the most important foreign capital source and export country, American has already become the main factor to influence China's economy. However whether the growth of American direct investment to China has got the relationship with persisting extension of bilateral trade between China and the United States or not? Whether there is consequence between American direct investment to China and Sino-American balance trade? The thesis will stand on the relationship between investment and trade ,through effect analysis to study the mechanism of US investment to China on Sino-US trade balance, Then, the thesis will use the quantitative method like Cointegration and Granger to analyse the relationship between US FDI to China and Sino-US trade balance.Finally,the conclusion shows that the US FDI to China really expand Sino-US trade balance.In the context of globalization, the Sino-US trade balance is the inevitable result in the development of economic globalization, it can not be eliminated in the short term. However, with the continued expansion of Sino-US trade balance, it not only exacerbated trade frictions between the two countries but also affect the formulation of U.S. policy toward China, which is not conducive to the development of Sino-US economic and trade relations, especially for China because it's highly dependence on trade with the United States ,so the issue of Sino-US trade imbalance worth considering. So, the thesis will stand on the conclusion that is US FDI to China really expand Sino-US trade balance, both from China and the United States to consider recommendation to ease the trade balance between two countries.