Research On The Relationship Between FDI And China's Balance Of International Payments

The purpose of this paper is to analyze the impact of FDI on China's balance of international payments. First, we look back the situation of making use of foreign capital in China. In the second chapter , we amplify concerned theory models of FDI's inspect on economy. In the meantime, we set forth FDI's possible impacts on economy. The third, fourth and fifth chapter are the keystones of this paper. The third chapter expatiates the impact of FDI on each item of our balance of payments. In the fourth part, we use co-integrated analysis method (VEC model) to analysis the affects of FDI on each part of China's balance of payments. The results show that there exists co-integrated relationship, which means that there exists steady dynamic long balanced relationship. In whole, FDI leads to the surplus of our balance of payments and foreign exchange reserve growing rapidly. But also brings a series of problem. In the fifth part, this paper provides corresponding advices and countermeasures. The last part is the conclusion.