Abstract:

This paper, based on economic characteristics such as low investment efficiency in China, draws from existing literature to construct a theoretical model that considers intermediate goods trade, inter-industry linkages, and investment efficiency. It investigates the potential impact of optimizing investment structure on China's economic growth in the context of prevailing trade protectionism. The theoretical research indicates that low investment efficiency (associated with increased trade costs) hinders economic growth. However, optimizing investment structure can not only directly enhance a country's output but also mitigate the negative effects of trade shocks on economic growth by reducing production costs and optimizing value–added structures. Using this analytical framework and combining cross–border input–output data from 32 countries for the period 2000–2014, this paper conducts empirical analysis. The findings suggest that regardless of changes in the trade environment, optimizing investment structure can effectively support the stability of the Chinese economy, making it a beneficial measure for alleviating current trade protectionism.

Key words:

investment structure, capital allocation, foreign trade, economic growth