First, the impact of long-term international capital flows.

Overall impact on the world economy.

(1) Maximize global profits. Long-term capital flow can increase the total output value and profit of the world economy, and tend to maximize it. Because one of the reasons for the international transfer of capital is that the profit of capital export is greater than the profit of capital staying in domestic investment, which means that the output value created by exporting countries in capital importing countries will be greater than the total output value reduced by capital outflow. In this way, capital flow will inevitably increase the world's total output value and total profit, and capital flow will generally follow the principle that where the profit rate is high, it will eventually maximize global profits.

(2) Accelerate the internationalization of the world economy. The internationalization of production, market and capital is the main symbol of the internationalization of the world economy. These three internationalization depend on each other and promote each other, which promotes the development of the overall economy.

After World War II, the internationalization of capital flows has formed a trend, which has been strengthening since the 1980s. In particular, the external environment and internal conditions for the internationalization of capital flows are constantly enriched, the establishment and perfection of global financial markets, the invention and application of high technology, the birth of new financial entities and the innovation of financial business, as well as the accumulation of knowledge and the change of thinking, which greatly increase the scale of capital flows, accelerate the flow rate and have a wider impact, and the solid material foundation it creates in turn promotes the internationalization of production and markets, making the world economy develop in a broader space and at a higher level.

(3) Deepen the internationalization of money and credit. First of all, it has deepened the internationalization of the financial industry. The international transfer of capital has promoted the establishment of the financial industry, especially the banking industry, and the banking network has spread all over the world. At the same time, it also promoted the development of multinational banks and the establishment of international financial centers, adding rich content to the international financial market. At present, the financial industry in many countries has become an offshore financial industry or an overseas financial industry, which is completely international. Secondly, promote the spread of monetary capital around the world. For example, international capital flows have greatly developed international capital in the form of loans and securities, and penetrated into every corner of world economic development. Third, the diversification of international capital flow subjects makes multiple currencies constitute international payment means. At present, the currencies of several countries with abundant long-term capital are relatively strong. Holding these currencies means realizing the international transfer of purchasing power more widely in the world, or having more choices to pay off international creditor's rights and debts. It can be seen that these have deepened the internationalization of money and credit to varying degrees.

2. Impact on capital exporting countries

Under normal circumstances, long-term capital flows have both positive and negative effects on capital exporting countries.

Positive impact:

(1) can increase the marginal return of capital.

Long-term capital exporting countries are generally countries with abundant capital or advantages in some production technologies. These countries have increased their total investment or investment in a certain production technology field; The marginal benefit of its capital will be reduced, thus reducing the expected profit rate of new investment. If these investments with lower expected profit rate are invested in countries with less capital or backward technology, the marginal benefit of capital use can be improved, the total income of investment can be increased, and then more considerable profits can be brought to capital exporting countries.

(2) It can promote the export of commodities.

Long-term capital export will promote the commodity export of exporting countries, thus increasing the profit income of export trade and stimulating domestic economic growth. For example, some countries use export credit to link foreign loans (that is, capital export) with the purchase of domestic complete sets of equipment or certain products in order to promote exports.

(3) Be able to quickly enter or expand the overseas commodity sales market.

(4) We can find a way out for the surplus capital and earn interest.

(5) it is conducive to improving international status. Generally speaking, capital export means that the country's material foundation is relatively strong, which means that the country is more capable of strengthening political and economic ties with other countries, thus helping to improve its international reputation or status.

Negative effects:

(1) must bear the economic and political risks of capital export.

Nowadays, the world economy and world market are complicated, and careless capital output, such as wrong investment direction, will lead to economic management risks. In addition, we have to bear the political risks of investment. This is reflected in the fact that when there are political changes in capital-importing countries, they may implement laws that are not conducive to foreign capital export, such as confiscating investment capital and even refusing to repay foreign debts. In the history of international debt, some countries stopped paying their debts because of the debt crisis, which is obvious proof.

(2) It will put pressure on the economic development of exporting countries.

Under certain monetary capital conditions, capital export will reduce domestic investment, thus reducing domestic employment opportunities, reducing domestic fiscal revenue, intensifying domestic market competition, and then affecting domestic political stability and economic development.

3. Impact on capital-importing countries

Positive impact:

(1) can make up for the shortage of funds in importing countries.

Indirect investment obtained by a country will flow to departments and regions lacking funds through market mechanism or other means; A country's direct investment will make up for the hollowing out of some domestic industries to some extent. In this way, it not only solves the problem of insufficient funds, but also promotes economic development.

(2) Advanced technology and equipment can be introduced to gain advanced management experience.

A large part of long-term capital flows is direct investment. The characteristic of this kind of investment is that it can directly bring technology, equipment and even sales market to importing countries. Therefore, as long as the investment is proper and the policy is scientific, capital investment will undoubtedly improve labor productivity, increase economic benefits and accelerate the process of economic development.

(3) It can increase employment opportunities and increase national fiscal revenue.

The purpose of capital investment is to create new enterprises or transform old enterprises to a great extent, both in developed and developing countries. In this way, it will help to increase employment opportunities, increase the gross national product, and then increase the national fiscal revenue and improve people's living standards.

(4) It can improve the balance of payments.

On the one hand, importing capital, establishing export-oriented enterprises and realizing import substitution and export orientation will help expand exports and increase foreign exchange income, thus improving the balance of payments. On the other hand, capital entering in the form of deposits may also constitute the source of a country's balance of payments.

Negative effects:

(1) may trigger a debt crisis.

If the importing country invests too much capital and exceeds its capacity, it may be unable to repay its debts, leading to the outbreak of the debt crisis.

(2) It may put the domestic economy in a passive position.

If too much capital is introduced and poorly managed, the domestic economy cannot flourish, and the importing country will have a strong dependence on foreign countries. In this way, once foreign capital stops exporting or withdrawing capital, the country's economic development will be in a passive position, and even its political sovereignty will be violated.

(3) Competition in the domestic market has intensified.

If a large number of foreign enterprises sell their products locally, it will inevitably intensify the competition in the domestic market, thus affecting the development of domestic enterprises.

Second, the impact of short-term international capital flows.

1, the impact on international trade

In international trade, short-term financial facilities provided by buyers and sellers (or banks), such as prepayment of loans, deferred payment and bill discount, are conducive to the facilitation of international trade and the smooth progress of international trade.

2, the impact on the balance of payments of countries.

(1) When a country has a temporary balance of payments imbalance, short-term capital flows are conducive to adjusting the imbalance.

When a country has a temporary deficit in its balance of payments, its currency exchange rate will fall. If speculators realize that this exchange rate decline is only temporary and is expected to rise soon, they will buy the country's currency at a lower exchange rate and sell it at a higher exchange rate after the exchange rate rises, thus forming a short-term capital inflow trend, which is obviously conducive to regulating the country's balance of payments deficit. On the other hand, when a country has a temporary surplus in its balance of payments, its exchange rate will rise. If speculators realize that the exchange rate rise is only temporary and expect to fall back soon, they will sell money at a higher exchange rate, wait for the exchange rate to fall back, and then buy money at a lower exchange rate. This kind of speculation leads to the short-term capital outflow of the country, which is obviously conducive to reducing the country's temporary surplus.

(2) When a country suffers from persistent balance of payments imbalance, speculative and hedging short-term capital flows will aggravate the balance of payments imbalance.

When a country has a persistent deficit, its currency exchange rate will continue to fall. If a speculator expects the exchange rate of his currency to fall further, he will sell his currency and buy other currencies, hoping that his currency will depreciate and other currencies will appreciate and make a profit. This kind of speculation will make the country's capital outflow, thus expanding the deficit and aggravating the imbalance of international payments. On the contrary, when a country has a persistent surplus, its currency exchange rate will continue to rise. If a speculator expects the exchange rate to rise, he will sell other currencies and buy the currency in the hope of making a profit after the currency appreciates. This kind of speculation will enlarge the country's surplus and aggravate the imbalance of international payments.

3, the impact on the international financial market

Short-term capital flows will aggravate the turmoil in international financial markets, which will lead to large fluctuations in exchange rates and more speculative activities. As mentioned above, when a country's balance of payments appears short-term imbalance, the exchange rate will fluctuate. Because speculators sell foreign exchange and buy local currency when the supply of foreign exchange is in short supply and the local currency exchange rate is low, or buy foreign exchange and sell local currency when the supply of foreign exchange exceeds demand and the local currency exchange rate is high. This speculative capital flow is not only conducive to the adjustment of the balance of payments, but also conducive to maintaining the stability of the market exchange rate. On the contrary, once a country suffers from a persistent imbalance in international payments, at this time, speculators buy foreign exchange when the supply exceeds demand and sell foreign exchange when the supply exceeds demand. This behavior is obviously not conducive to the balance of payments and exchange rate stability. Therefore, this kind of speculation will make the international financial market turbulent, but there is one exception, that is, if a country has a persistent balance of payments imbalance, it is because its exchange rate is too high or too low and it has not been adjusted in time. At this time, this kind of speculation will force the country to make timely adjustments to keep the exchange rate at a reasonable level, which is also of positive significance.