First of all, this paper presents the definition of foreign competitiveness based on the framework of balance of payment. According to the theory of balance of payments growth, the balance of current account is the key factor of a country changing from a debtor nation to a creditor nation. So we emphasized the structure of current account and factors affecting it. The main contents of this paper are trade in goods and services and investment income,.which are listed in the current account. Through researches on the factors affecting foreign competitiveness of China, the result indicates that the stage of balance of payments growth, technological progress, inward of direct investment, and the development of private enterprises have significant effects on Chinas foreign competitiveness.