Research On The Effect Of Trade Structure On China’s Direct Investment Of Manufacturing Industry In America

International direct investment and international trade are two important forms for every country to participate in the world economic activities, which have become one of the important topics on economics research with the rapid development of economic globalization and trade-investment integration. As manufacturing industry is the mainstay industry of national economy, governments are actively adjusting the development of manufacturing industry to accelerate its integration into the process of economic globalization. In recent years, the United States has pioneered the manufacturing regression strategy. Meanwhile China has accelerated advancing the development of the strategic emerging industry. Under such a background, China’s direct investment of manufacturing industry in the U.S. and the trade on relevant industries between China and the U.S. has maintained rapid growth, with their trade structure being changed. Trade structure, as the basis of international trade, will get alteration along with the changes on economic policy and trade activities in the host country and home country, which also reflects relevant countries’ industry development level. Thus, the research on the relationship between China’s direct investment of manufacturing industry in the U.S. and the structure of the two countries’ trade in manufacturing industry does good to guiding enterprises to form foreign investment strategy that suits them and establish good interaction between international investment and trade.This paper is based on the relationship between China’s direct investment of manufacturing industry in the U.S. and the structure of export and import commodities with integrated application of cointegration theory and autoregressive distributed lag model. First of all, it expounds the effect mechanism of trade structure on foreign direct investment to confirm the relationship between the two. In view of the theoretical analysis, the data of China’s manufacturing investment in the U.S. and the export and import trade on subdivided industries with the U.S. are selected from 2003 to 2014.Then according to certain classification standard, these industries are divided to three categories—labor-intensive industry, capital-intensive industry and technologyintensive industry, which are used in autoregressive distributed lag model(ADL)established for the empirical test of the relationship between Chinese investment in America and relevant industry trade, including unit root test, granger causality test and cointegration test. Results show that China’s manufacturing investment to the U.S. incurrent period will inhibit the export of capital-intensive industry to America. But for the long time, investment in the U.S. still plays a significant role in promoting China’s capital-intensive and technology-intensive industry trade with the United States, while it has no significant influence on labor-intensive industry trade. Overall, China’s manufacturing investment in the U.S. promotes the optimization of manufacturing trade structure for China. Finally, on the basis of the results of theoretical analysis and empirical analysis, the paper propounds some suggestions from the perspective of government and enterprises respectively to facilitate China’s investment to American manufacturing industry and the manufacturing trade between these two countries.