Research On The Effect Of FDI To China's Balance Of Payments

Foreign Direct Investment (FDI) and Balance of Payments have been noticed by economic theory circles at all times. Early research could be divided into two different routes: one was the theory of International Direct Investment; the other was the theory of Balance of Payments. Both theories had respectively developed. FDI started to spring up in the middle of the last century. From 1980's, FDI has largely flowed to the Newly-Industrial Courtiers and developing countries, which greatly affected their Balance of Payments. So there is a very important realistic and academic significance to research the effect of FDI to the Balance of Payments in a uniform analytical frame, based on the theories of FDI and Balance of Payments. At first, this paper set up a new academic analytical frame on the base of the above theories. The frame was that FDI affected the Balance of Payments and its'structure by Trade Flow Path and Capital Flow Path. Then, this paper mainly did an empirical research on China. The result of the research showed that FDI had positively affected China's general Balance of Payments and its'structure by the two paths. The above frame had been further demonstrated. At last, this paper put forward some advice on how to adjust China's Balance of Payments by FDI, based on the above frame, the trend of FDI and the policy goal of China's Balance of Payments. The detailed structure of this paper is as follows: Chapter One: the background of the issue researched, the meaning of this paper, the intent of this paper, the measures of such research, the innovation and lack of such research. Chapter Two: the comment in terms of the main theories employed in this paper during the process of research. Chapter Three: setting up a new academic analytical frame on the base of the above theories and explaining the frame. Chapter Four: doing an empirical research on China. Analyzing the effect of FDI to China's general Balance of Payments and its'structure and drawing the corresponding result in order to demonstrate the frame. Chapter Five: putting forward some advice on how to adjust China's Balance of Payments by FDI, based on the above frame, the trend of FDI and the policy goal of China's Balance of Payments. Chapter Six: the conclusions.