| Abstract | China’s trade surplus is entirely from the foreign-related processing trade. The traditional customs statistical method, which is used to measure the inter-industry trade, cannot accurately reflect the intra-industry international trade today. The logistics digit corresponds to the GDP concept exaggerated the cash flow in the real trade imbalance. This paper used 2007 non-competitive input-output table and the ownership structure information of 43 911 foreign invested manufacturing corporation to split the capital flow and logistics in China’s processing exports. The results show that, first, almost 1/3 of the trade surplus’ poverty belong the foreign enterprises. Second, excluding the poverty of US enterprise, the trade imbalance between US-Sino should be adjusted approximately 44.14%. The foreign factor is the main reason for the huge trade surplus in China, which maintain the sustainability of China’s short-term trade imbalance. |