US FDI in China Has Widened China-US Trade Surplus

The paper analyzes the impact of U.S.direct investment in Chino on the Sino-US trade balance.The research shows that US FDI in China has largely widened the US-Chino trade deficit.On the one hand,cost-oriented US investment enlarged Ch/nese export to the US;on the other hand,market-oriented investment decreased US exports to China.Moreover,China’s surplus against US high-technology products is mainly created by foreign invested enterprises.Therefore,the paper suggests that China should adjust its FDI policies to reduce the trade surplus against the US,thereby calming the trade dispute with the US as well as other countries.