When market failure occurs, the role of the automatic adjustment mechanism of the balance of payments will be weakened or ineffective, requiring appropriate government intervention in the market to achieve balance of payments. The government has various means to adjust the international balance of payments, and governments of various countries adopt different measures to adjust the international balance of payments according to their own national conditions.

1. Foreign exchange stabilization fund The central bank allocates a certain amount of foreign exchange reserves as the foreign exchange stabilization fund. When a short-term imbalance occurs in the balance of payments, the central bank buys and sells foreign exchange in the foreign exchange market to adjust the supply and demand of foreign exchange and affect the exchange rate, thus promoting exports, increasing foreign exchange income and improving the balance of payments.

2. Fiscal policy Fiscal policy is an economic policy that the government uses to regulate the economy using fiscal revenue and fiscal expenditure. Its main tools include fiscal revenue policy, fiscal expenditure policy and public debt policy. Fiscal policy is usually used as a means to regulate the domestic economy, but because changes in aggregate demand can change national income, prices, and interest rates, and activate the monetary and income adjustment mechanisms of the balance of payments, fiscal policy becomes a means of adjusting the balance of payments. For example, when a country has an international balance of payments deficit, the government can adopt tightening fiscal policies, such as cutting government spending or raising taxes, forcing investment and consumption to decrease and prices to fall relatively, thereby benefiting exports, suppressing imports, and improving trade balances. and balance of payments. On the contrary, when a country's international balance of payments surplus is large, the government can implement active fiscal policies, such as expanding government spending or reducing taxes, to expand aggregate demand, increase imports and non-trade expenditures, thereby reducing the trade balance and international balance of payments. Branch surplus.

3. Monetary policy Monetary policy is an economic policy used by the central bank to affect the level of macroeconomic activity by adjusting the money supply. Its main tools are open market operations, adjusting the rediscount rate and the statutory reserve ratio. Since changes in the money supply can change interest rates, prices and national income, and activate the currency and income adjustment mechanism of the balance of payments, monetary policy becomes a means of adjusting the balance of payments. When adjusting the balance of payments imbalance, policies that change the rediscount rate to affect market interest rates are mainly used. For example, when a country has a balance of payments deficit, the central bank can increase the rediscount rate, market interest rates will also rise, investment and consumption will be suppressed, and prices will begin to fall, which will benefit exports, suppress imports, and improve the trade balance. At the same time, the increase in market interest rates will also help attract foreign capital, thus improving the international balance of payments. Both fiscal policy and monetary policy can directly affect the total social demand and thereby adjust internal equilibrium. However, it has obvious limitations as a means of adjusting the international balance of payments, which is mainly reflected in the fiscal or monetary policies adopted to solve the problem of international balance of payments imbalances. May conflict with domestic economic objectives. Therefore, when the government chooses fiscal and monetary policies to achieve balance of international payments, it must pay attention to timing.

4． Exchange rate policy Exchange rate policy refers to a country's policy of adjusting the international balance of payments and eliminating imbalances in the international balance of payments by adjusting the exchange rate of its currency. For example, when a country has an international balance of payments deficit, the country can devalue its currency to enhance the competitiveness of its goods abroad and expand exports; at the same time, the local currency prices of foreign goods rise, competitiveness declines, imports decrease, and international balance The branches gradually return to balance. On the contrary, when a country has a long-term international balance of payments surplus, the country can appreciate its currency, and the appreciation of the local currency stimulates imports and reduces exports. Both of them work together on the trade balance, reducing the trade surplus and gradually improving the international balance of payments. Restore balance. Of course, in addition to affecting the international balance of payments, exchange rate policy will also affect other aspects of the national economy.

5. Direct control policy Direct control policy refers to policy measures in which the government directly intervenes in foreign economic transactions to achieve balance of payments regulation. Direct control includes forms such as foreign exchange control, trade control and fiscal control. Most international economic organizations and economic theories do not favor the use of direct control, but when serious difficulties occur in the balance of payments, both developed and developing countries have adopted direct control to varying degrees. (1) Foreign exchange control. It mainly refers to the administrative intervention of a country's government in foreign exchange trading and international settlement through relevant institutions. Foreign exchange controls are usually implemented by the central bank, foreign exchange management departments or financial departments. Commonly used foreign exchange control measures in various countries include: ① Restricting private holdings of foreign exchange, such as stipulating that exporters must sell all or part of their foreign exchange earnings to the state at official prices. ② Restrict private purchases of foreign exchange, such as limiting the amount of foreign exchange purchased by importers. ③Restrict capital input, such as increasing the statutory reserve ratio for non-resident deposits, not paying interest or charging interest on non-resident deposits; restricting non-residents from purchasing domestic securities; restricting enterprises from using foreign debt, etc. ④ Restrict capital exports, such as restricting currency convertibility under capital and financial items; restricting the transfer of funds from resident deposit items to non-resident deposit accounts; imposing an interest balancing tax, etc. ⑤ Implement a compound exchange rate system, that is, stipulate different exchange rates for the national currency for different items or commodities in international settlements. ⑥ Prohibit the export of gold and limit the amount of local currency that individuals can carry into and out of the country. Of course, the International Monetary Fund takes a negative attitude towards foreign exchange controls in principle. (2) Trade controls. It mainly refers to the policy means by which a country's government directly limits the quantity of imported and exported goods. Commonly used trade control methods in various countries include: ①Import quota system, that is, the government stipulates the quantity limit of a certain imported commodity for a certain period of time. ②Import license system, that is, the government restricts the type and quantity of imported goods by issuing import licenses.

③Stipulate strict import technical standards, including health and quarantine conditions, green and environmental protection requirements, safety performance indicators, technical performance regulations, packaging and labeling regulations, etc. ④ Discriminatory procurement policies, such as requiring government departments and enterprises to purchase domestic goods as much as possible and restricting their purchase of imported goods. ⑤ Discriminatory tax policies, such as the government levying higher sales tax, consumption tax and license tax on imported goods. (3) Fiscal control. It mainly refers to the policy means by which a country's government controls the price and cost of imported and exported goods through relevant agencies, such as the Ministry of Finance, customs and official financial institutions, thereby regulating the international balance of payments. Fiscal control measures commonly used by various countries include: ①Import tariff policies, such as increasing tariff rates to limit the quantity of imports, or reducing tariffs on certain imported production materials to support the development of domestic import substitution and export substitution industries. ② Export subsidy policies, such as price subsidies and export tax rebates for export products. ③Export credit policies, such as official financial institutions providing preferential loans to domestic exporters or foreign importers; discounting exporters' bills at preferential interest rates; the government providing credit guarantees to exporters or exporter banks, etc. When direct control measures become the basic means for the government to adjust the international balance of payments, the advantages are obvious: ① The results are quick and less intermediate links need to be passed through the market mechanism. ②Because it relies less on market mechanisms, developing countries with low market development can effectively use this method, that is, it has better operability. ③ Its efficacy is easy to measure. ④The impact on the domestic economy is small, and the government has greater flexibility in adopting this adjustment method. ⑤ Enable the government's economic regulation to go deep into the microscopic realm, which can overcome certain limitations of macroeconomic regulation methods such as fiscal and monetary policies. Of course, direct control as a basic means of regulating the international balance of payments also has disadvantages: ① It is susceptible to retaliation from the other party, thus bringing negative impacts to international trade and international finance. ②It itself will cost a certain amount of administrative expenses and information costs. ③ It may distort market price signals, prevent the market mechanism from giving full play to its role, and prevent the international division of labor from fully utilizing its own advantages. ④ It restricts competition to a certain extent and will weaken the innovation motivation of domestic enterprises. ⑤ Rent-seeking behavior may occur and encourage unhealthy trends, such as the frequent exchange of power and money in the allocation of quotas and licenses.

6. Supply adjustment policy When using policies to adjust the balance of payments, the role of total social supply should not be ignored. From a supply perspective, policies to regulate the balance of payments include industrial policy, science and technology policy and institutional innovation policy. These policies aim to improve a country's economic structure and industrial structure, increase labor productivity, increase the production of export goods and services, improve product quality, and reduce production costs, so as to increase the number of social products (including export products and import substitutes) supply and improve the balance of payments. Supply policy has a long-term nature. Although it is difficult to have immediate results in the short term, it can fundamentally improve a country's economic strength and technological level, thereby creating conditions for achieving internal and external balance. (1)Industrial policy. The core of industrial policy is to optimize the industrial structure, formulate correct industrial structure planning based on changes in the international market and its own comparative advantages, encourage the development and expansion of some advantageous industries, adjust and restrict some industrial sectors that lack fundamental competitiveness, and even Cancel. The important purpose of the government's implementation of industrial policies is to overcome obstacles to the flow of resources among various industrial sectors, so that changes in the country's industrial structure can adapt to the conditions of the world market, thereby reducing or even eliminating structural imbalances in the balance of payments. (2) Science and technology policy. The economic competition among modern countries is increasingly reflected in the competition of scientific and technological level. Science and technology are the primary productive forces, and it has become the common understanding of governments and people of various countries to play the core role of knowledge in economic growth. For developing countries, the meaning of science and technology policy includes the following three aspects: first, promoting technological progress. From an internal perspective, we must attach importance to and strengthen the research, application and promotion of science and technology, attach importance to technical education, encourage technological invention and innovation, and continuously improve the original traditional technology. From an external perspective, it is necessary to introduce foreign advanced technologies and directly adopt foreign advanced production methods or processes in existing enterprises or newly-established enterprises to replace traditional production methods and process technologies. The government should play a guiding role in both tasks and guide enterprises to achieve technological progress. Second, improve management levels. Modern management is the result of economic development, which in turn greatly promotes further economic development. The focus of improving management level is to adopt advanced management concepts, methods and management experience, improve management methods, and cultivate the entrepreneurial class. Third, strengthen investment in human capital. Human capital plays a very important role in social and economic development. It is the main body of management using science and technology. For developing countries, the decisive factor that truly restricts their economic development and modernization is not just physical capital and technology, but the lack of human capital advantages. The low quality of the labor force is unable to use and manage modern technical equipment. Increasing investment in human capital mainly involves increasing investment intensity, adjusting the educational structure, reforming the educational system, and encouraging international exchanges, thereby ultimately improving the quality of the country's labor force. (3) Institutional innovation policy. Institutional innovation policies are proposed to address the institutional flaws existing in the economy. For example, many countries have a large number of large-scale, extremely inefficient state-owned enterprises. Due to unreasonable systems, these enterprises respond slowly to market signals, lack the ability to self-discipline and develop themselves, and have extremely poor operating conditions. They often have to rely on the state. A large number of implicit or explicit financial subsidies are maintained.

If the inefficiency existing in the economy has general institutional causes, institutional innovation is very necessary. Institutional innovation policies mainly manifest themselves in the reform of enterprise systems, including the reform of the investment system when the enterprise is founded, the reform of the enterprise property rights system, and the corresponding enterprise management system reform. Dynamic and highly competitive microeconomic entities are the basis for achieving the goal of balancing the international balance of payments.

7. Policy Matching In fact, what kind of policies a country's government adopts to adjust the international balance of payments depends first on the nature of the international balance of payments imbalance, secondly on the domestic social and macroeconomic structure when the international balance of payments is imbalanced, and thirdly on the internal balance. relationship with external balance. Each balance of payments adjustment policy will bring more or less adjustment costs to the macroeconomy, so decisions must be made carefully and various policies must be used in combination to achieve a balance or equilibrium in the balance of payments with minimal economic and social costs. Correct policy matching is the core of successful adjustment of the balance of payments. Governments of various countries often take their own national interests as the starting point when adjusting the balance of payments. The relevant adjustment measures taken may have an adverse impact on other countries, leading other countries to take corresponding retaliatory measures. In order to maintain the normal order and operation of the world economy and finance, governments of various countries need to strengthen international coordination on balance of payments adjustment policies. 1. The general principles of international balance of payments regulation are established through various international economic agreements. For example, the International Monetary Fund stipulates the principle of multilateral settlement, the elimination of foreign exchange controls, and the prohibition of competitive currency devaluation; the World Trade Organization stipulates the principle of non-discrimination, the principle of tariff protection and tariff concessions, the principle of the elimination of quantitative restrictions, the prohibition of dumping and The principle of restricting export subsidies, the principle of consultation and mediation, etc. These principles are centered on economic and financial liberalization and ease conflicts between countries by restricting countries from adopting adjustment policies that benefit themselves at the expense of others. 2. Financial facilities are provided to countries with balance of payments deficits through international financial organizations or international agreements to alleviate the problem of insufficient international solvency. For example, the International Monetary Fund issues relevant loans to its member states to solve temporary balance of payments difficulties, and establishes special drawing rights to supplement the international reserve assets of member states. Through the "General Arrangement of Borrowing" or currency swap agreement, relevant countries are required to commit to providing certain funds, which can be used by countries with balance of payments deficits under certain conditions to alleviate balance of payments deficit problems and stabilize exchange rates. 3. Establish regional economic integration groups to promote regional economic and financial integration and balance of payments regulation. At present, regional economic integration groups in the international economy mainly include preferential trade arrangements, free trade areas, customs unions, economic communities and unified currency areas. For example, in the European Union, it has basically realized the liberalization of the international flow of goods and factors, formulated a unified agricultural policy, and has taken solid steps on the road to monetary integration. Currently, 12 countries have joined the euro area. , to alleviate the imbalance of international payments among member countries through relevant policy coordination.