A Research On International Capital Flows In Our Country

The Balance of Payments of our country has been greatly influenced by the opening policy and foreign capital flows since 1980s. In this paper, the author empirically studies how foreign direct investment (FDI) and international indirect investment influence our Balance of Payments, by analyzing relevant data of the Statement of Balance of Payments, after reviewing the theories in this area.The author firstly reviews the basic situation of our Balance of Payments and relevant theories in international capital flows, and discusses the main characters of China's capital inflows, and then deeply studies the impact of international capital flows on the main accounts of Balance of Payments by using both quantitatively and qualitatively analytical methods, and building mathematical models. The author finds that on one hand, FDI made great contribution on satisfying the domestic capital demand, and boosted the development of China's international trade, as well as the technology standard of the exports, on the other hand, FDI also created big amount of deficit in current account. As concerned as the indirect investment, though China's foreign loans has been increasing in recent years, the Balance of Payments has not been negatively influenced, for the relevant indexes are still in the safe range.At last, the author comes up with a few suggestions on how to enhance the quality of FDI inflows, make a bigger FDI outflows, make better use of the indirect investment, and reinforce the supervision and management of potential risk, from the perspective of the Statement of Balance of Payments.