Research Of Impact Of East Asian FDI In China On Sino-Us Trade Imbalance

Since the reform and opening, China-US bilateral trade is developing at an unprecedented pace, while Sino-US trade surplus is expanding each year. China has become the largest source of U.S. trade deficit. Sino-US trade imbalance has become the focus of Sino-US trade disputes, and also the United States’excuse to restrict China’s export and ask China to revalue its currency. Therefore, it becomes increasingly necessary and important to in-depth analysis the cause of the Sino-US trade imbalance and seek to explain this problem with reasonable accuracy, then guide China-US economic and trade developing at the policy level and operational level.Theorists have been exploring the causes of Sino-US trade imbalance from different perspectives, including the statistical differences, the RMB exchange rate, the U.S. savings rate, trade policy, intra-industry trade, industrial transfer, FDI, and so on. From the FDI thinking about the reasons of the Sino-US trade imbalance, the academic opinion has been reached a consensus. In a number of factors, the role of foreign direct investment continues to highlight more and more attention. East Asia FDI is the main source of China’s FDI and it plays a pivotal role. So it is necessary to analysis the impact of East Asian FDI on Sino-US trade imbalance.The existing studies mainly choose global FDI or the U.S. FDI and analysis their impact on Sino-US trade imbalance, few scholars have specially selected East Asia FDI, and examed its impact on Sino-US trade imbalance. At the same time, although a small amount of research indicates that East Asia FDI may be cause surplus transfer effects, but the method is limited to qualitative analysis. So, what effect does the East Asian FDI cause on Sino-US trade surplus? How big? These issues require further study.From the investment and trade relations perspective, this paper analysis the impact of East Asian FDI to the Sino-US trade balance. First, by comparison of the data, charting, we describe the status and trends of East Asia FDI in China and Sino-US trade imbalance; then use cointegration test and measurement models, quantitative analysis the impact of East Asia FDI on the Sino-U.S. export trade, import trade and the trade surplus. The empirical results show that East Asia FDI expands Sino-US export trade, thus exacerbating the Sino-U.S. trade imbalance. This article also found that East Asia FDI and the United States FDI in China have exacerbated the Sino-US trade imbalance, but the impact of East Asia’s FDI is greater. China should actively implement independent innovation strategy, speed up the pace of industrial structure adjustment, and improve China’s status in East Asia industrial chain. Meanwhile, China should implement the export diversification strategy; reduce the final products’ dependence to U.S market.