International Industrial Capital Flows And The Balance Of Payments

International industrial capital has been a noticeable phenomenon of the world economy. In order to obtain the best resource allocation, international industrial capital hunts for the best areas in all of the world. That speeds up the internationalization process of the economy and industry. At the same time, it plays an important role on a country balance of payments, economic growth, industrial structure adjustment. From 1979 to 1999, we have taken advantage of 296.67 billion dollars foreign investment. China has been the second country that utilized the most foreign capital but for the USA since 1992. International capital became a very essential part on increasing economy and developing society. This paper put the emphasis on the international capital which flows to undeveloped countries and Newly industrializing economies, It analyzes the leverage to the host countries?balance of payments. Making use of both theory and positive analysis, I study the affect that international industrial capital resulted on the change of import & export trade quantity and structure in host country, and the mutual mechanics between foreign direct investment and the rate. In the end, according to reality, I put forward some suggestions on the policys how to attract foreign capital in the future, how to improve the import & export trade quantity and structure, and how to perfect the rate.