The Impact Of China's Outward Foreign Direct Investment Under The Conditions Of The Imbalance Of International Payments In The Empirical Study

In double surplus driven by the current account, capital and financial account, China's foreign exchange reserves are growing and expanding the amount year by year. Long-term sustainability dual surplus of the balance of payments in the pattern also essentially manifests the imbalance of payments, which also shows the imbalance of China's external economic. It will inevitably have an impact on domestic economic balance. So it becomes one of the objectives of macroeconomic policy to resolve the international balance of payments continuous surplus in the status quo. With the continuous deepening of open-door to the outside world, China further expands the scale of outward foreign direct investment (outwardFDI). OutwardFDI continues to embody the effect in economic development. The study of foreign direct investment gradually deepens and becomes hot spots in international investment field. How to solve the larger of China's trade surplus and imbalance of payments is of great significance to promote China's economic and social development effectively into the scientific track. Therefore, it can be regarded as a good way to improve international balance of payments that the government perfects foreign investment promotion and coordination mechanisms, support the strong qualified enterprises "going out", and gradually promote domestic enterprises outwardFDI. This paper aims to explore the relationship between China's outwardFDI and China's international balance of payments.This paper as well as analyzes China's "going out" strategy to improve the role of China's international balance of payments in the new international economic situationBased on principles of International Economics, under the conditions of open economy macroeconomic equilibrium includes the equilibrium of the product market, money market and the international balance of payments. Among them, the external balance depends largely on the capital flows. The unsteady international capital flows will lead to a variety of financial risk, and thus the external economic imbalances. In addition, the external imbalances will be transmitted into inner economy and causes the overall macro-economic imbalances. This article reviews that the past researchers put forward the theory of international direct investment. And this article combines with the current status of the global imbalance of international payments and export-led in our country is no longer the main driver of economic growth of the macro-economic background. This article introduces IS-LM-BP model to analyze the transmission mechanism between the international balance of payments and foreign direct investment through the collection China's international balance of payments and foreign direct investment data since 1985. Finally the article uses stepwise regression and ridge regression from both qualitative and quantitative point of view to study the impact of China's outwardFDI on the balance of payments and draws corresponding conclusions and policy recommendations.This article selects 23 year sampled data from 1985 to 2007, including ODIf expresses that the t time China's outwardFDI's flow, ODIs expresses t-1 time China's the storage of outwardFDI, dollar-denominated GDP, Current as the current account, Goods for the cargo trade, Service for the trade in services, Capital as the capital financial accounts and FDI as foreign direct investment and so on. It draws the following conclusion through the regression: the impact of the current account balance of the six factors, only Goods, ODIs and the GDP's influence is the most obvious, of which Goods and GDP changes the current account balance in the same direction, but only then the storage of outwardFDI has the reverse influence to the current account balance. Under the ordinary circumstances China's outwardFDI has the positive influence to our country capital financial accounts balance. As a result, China's outwardFDI's flow expresses as the outflow of funds in the year, therefore China's outwardFDI's flow has the reverse influence to the capital financial accounts balance. Foreign direct investment replaces domestic savings in situation of the relative surplus savings, foreign capital flow and large foreign exchange reserves. It requires that China makes good use of foreign direct investment while outward foreign investment. This is the needs not only that China's enterprises deal with the current international financial crisis as well as the layout of future development, but also that it helps the world economy to restore stability which urgently needs funds and employment opportunities. This is a long-term process, but also the only way of China's economic internationalization and marketization.