Facts and Fallacies about U.S. FDI in China
Despite the rapid expansion of U.S.-China trade ties, the increase in U.S. FDI in China, and the expanding amount of economic research exploring these developments, a number of misconceptions distort the popular understanding of U.S. multinationals in China. In this paper, we seek to correct four common misunderstandings by providing a statistical portrait of several aspects of U.S. affiliate activity in the country and placing this activity in its appropriate economic context.
The authors thank Rob Feenstra, Nicholas Lardy, Shang-Jin Wei, Stephen Yeaple, and Bill Zeile for helpful comments and suggestions. Some sections of the paper draw upon earlier work by the authors, especially Branstetter and Lardy (2006). The statistical analysis of unpublished data on U.S. multinational companies reported in this study was conducted at the U.S. Bureau of Economic Analysis under arrangements that maintained legal confidentiality requirements. Views expressed are those of the authors and do not necessarily reflect those of the Bureau of Economic Analysis or the National Bureau of Economic Research.