Research On How The BITS Influence Trade Between China And USA

Since the establishment of diplomatic ties between China and the United States in 1979, the two sides have not signed a bilateral investment treaty, but it has important significance to grasp how the bil ateral investment agreements promote trade. In this paper, there will be theoretical and empirical analysi s of how bilateral FDI influence trade between two cuntries, combined with previous studies on how the BIT promote the bilateral FDI, we will go further to recognize the great influence of bilateral investm ent agreements on trade. This paper starts from the introduction part which introduces the research back ground, purpose, meaning, and the domestic and foreign research situation of the problems outlined in de tail, and then the two parts including theoretical and Empirical Study, theoretical part first introduces basi c concept of the bilateral investment agreements, background of economy and trade in detail, and separa tely introduce the development of Sino US bilateral investment agreements. The key part of the theory o n bilateral investment agreement is theory of how FDI influence trade and mechanism by which FDI influence trade. The empirical aspect uses FDI, GDP, exchange rate, fixed assets investment between Ch ina and the United States as variables, through the multivariate linear regression model, we will find ho w these variables influence China’s import and export, finally we conclude that the FDI from USA pro motes the export of our country, and expand the Sino US trade surplus, if the two countries signed a bil ateral investment treaty words, it will expand Sino US trade surplus. In the end, this thesis proposes tha t the challenges China will meet and gives the suggestions about the corresponding policy recommenda tions.