With the rapid growth of foreign direct investment (FDI) in the world, FDI plays an increasingly important role than the trade in the process of economic globalization and integration. However, the effect of international capital on economic growth is ambiguous. Moderate foreign capital inflow can solve the problem of insufficient funds in the real economy and promote the development of the virtual economy as well. Empirical analyses have shown that the impact of long-term international capital flows on economic growth is more favorable and long-lasting, but the rapid pace of short-term international capital flows has an unstable impact on a country’s economy. This study explores the impact of China’s long-term and short-term international capital flows on GDP since 1971, and the results show that both long-term and short-term international capital flows could benefit economic growth before 2011. Although short-term international capital flew out rapidly after 2012, it did not reduce the steady growth trend of China’s economy.

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The Prebisch-Singer Hypothesis states that in structural time series analysis, the terms of trade between primary products and manufacturers have a negative deterministic trend. Many researchers argued that the deterioration in trade is the type of country in which the products are exported, regardless of whether the types of products exported by such countries are primary or manufactured products. This paper employs a development-differentiated model to analyze the correlation between various terms of trade and the export proportion of manufactured products on different economies of development status. In the long run, stable co-integration relations exist between terms of trade and the export proportion of manufactured products for development status. Furthermore, the increased proportion of manufactured products exports is the Granger casualty for the worse terms of trade for several economies of development status. The results demonstrated that changing the terms of trade is significantly influenced by structured changes in the export proportion of manufactured products for the development status of economies.