Capital outflow refers to the increase of domestic and foreign assets, that is, the increase of claims held by domestic residents against non-residents, or the decrease of domestic and foreign liabilities, that is, the decrease of claims held by non-residents against domestic residents. Capital outflow means that domestic capital flows abroad in four ways: ① domestic and foreign assets decrease. For example, foreign countries reduce their stock investment in their own direct investment or indirect investment. (2) the country's foreign debt has increased. For example, domestic loans and bond investments to foreign countries have increased. (3) Reduce domestic debts to foreign countries. For example, a country pays off its foreign debt or a foreign country reduces its loan or bond investment. (4) the country's assets abroad have increased. For example, China's foreign direct investment and stock investment have increased. The purpose of capital outflow is to obtain higher profits or interest income. According to the different subjects of capital export, it can be divided into national capital export and private capital export.
Inflow is the inflow of foreign capital into the country. There are four ways: ① Increase of foreign assets at home. For example, foreign countries increase stock investment in domestic direct investment or indirect investment. (2) the country's foreign debt has decreased. For example, foreign countries pay back their debts or reduce their investment in foreign loans or bonds. (3) Domestic and foreign debts increased. For example, foreign investment in domestic loans and bonds has increased. (4) the reduction of domestic assets abroad. For example, China's foreign direct investment and stock investment have decreased. The purpose of capital inflow is also to obtain higher profits or interest income. According to the different subjects of export capital, it can be divided into national capital inflow and private capital inflow. National capital inflow refers to the export of capital by foreign governments and their subsidiaries to their own countries or the withdrawal of investment or loans by their own governments and their subsidiaries abroad; Private capital inflow refers to foreign private capitalists or capitalist groups importing capital into their own countries or withdrawing their investments or loans abroad. Capital inflow is the domestic income of foreign exchange, which should be recorded in the domestic balance of payments or indicated by "+". In the international capital flow of capital exporting countries, the country where capital flows out is the creditor country of capital.