Study On The Impact Of Foreign Direct Investment On China's Balance Of Payments

With changing environment in 2018,China will embark on a new journey of reform and opening up.The period of fission of the world economic structure and order,the critical period of transformation of China's economic structure,the period of release of deep-seated problems and the period of implementation of China's new round of major reforms have determined the historical and international orientation of China's macroeconomics.It is also the basic starting point for reform,adjustment and macro-control.During this period,how to clearly understand the situation and formulate reasonable and effective policies has became the main task of the macro-economy.The balance of payments links a country's income and expenditure decisions to changes in the country's wealth.Balance of payments is not only related to a country's external wealth and the balance of internal wealth,but also related to a country's macroeconomic development.At the same time,foreign demand has fallen under the trade conflict with U.S.,which has worsened the balance of payments.The balance of payments imbalance has caused devaluation pressure on the RMB.Foreign investment can buffer the pressure on balance of payments caused by the decline of trade surplus,which makes foreign investment as an important form of investment,and makes it urgent to study the relationship between foreign direct investment and balance of payments in the current environment.By studying the relationship and influence mechanism between foreign direct investment and balance of payments,we can more clearly grasp the changes in balance of payments,thus maintaining the stability of the exchange rate system and the sound development of the macro-economy.Based on this,the countermeasures proposed to adjust China's balance of payments by using FDI have a certain practical guiding significance.In order to formulate reasonable and effective policies according to the behavior of foreign direct investment and maintain the balance of payments and the stability of the exchange rate system,the author combs,summarizes and draws lessons from the theory of the impact of foreign direct investment on balance of payments firstly.Then the author makes observations and summarizes the current situation of foreign investment and balance of payments in China.On this basis,the empirical analysis of the actual use of foreign direct investment and the items affected in the balance of payments statement in China leads to the conclusion that foreign direct investment is the cause of the gap in the balance of payments,and has a significant positive impact on the gap in balance of payments.In reality,the smaller the balance of payments,the better.Therefore,foreign direct investment has a negative impact on the balance of payments.Finally,based on the empirical analysis,this paper puts forward the suggestions of establishing fair competition environment and supporting legal system,optimizing the industrial structure of foreign investment,and strengthening the financial supervision of foreign enterprises.