US FDI in China Has Widened China-US Trade Surplus

YANG Laike1( 杨来科 ) and LIAO Chun2( 廖春 )

Editorial note:

China is currently one of the world’s largest FDI recipients and also a country often plagued by trade disputes. The unsteady relationship between FDI and China’s trade, however, has not received adequate attention. According to the paper titled “US FDI in China Has Widened China-US Trade Surplus”, the cost-oriented US investment helps expand China’s export to the U.S.A., whereas the market-oriented investment reduces the US export to China. Therefore, the China-U.S. trade imbalance may, in essence, pseudo-proposition.

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