A Study Of The Influence FDI Inflow Have On China's Service Trade

With the formation of the global service economy, service industry, instead of manufacturing, is becoming the focus of international competitiveness and the important force for economic development of countries. Led by the development of service industry, world trade in services began to flourish, with the expanding size and the rising share of international trade. At same time, the inflow of foreign direct investment to the services sectors is growing worldwide, which made service industry,rather than manufacturing, become the main bearer of foreign direct investment. In China, the development of service trade and foreign investment followed the pace of the world's. Services trade is growing gradually, in 2009, it ranked fifth in world services exports and fourth in imports. Meanwhile, along with the continually expanding of the opening o f services after WTO accessions, more and more multinationals began to enter China's service industries, such as finance, telecommunication and distribution industries, which made an upward trend of foreign investment in services in China. In 2009, the actual utilization of foreign capital in services is 413.3 billion dollars, more than three times of the 13.61 billion U.S. dollars in 2000,and the proportion of China's actual utilization of foreign capital reached 45.9%. The increase in services FDI bring capital and technology to the development of services, improve the quality and structure of our services, so as to enhance the international competitiveness of China's service trade. In this case, it will have significant sense to effectively induce FDI to our service industry and develop our service trade by researching the relations of foreign direct investment and services trade in China.While on the study of this issue, we will described it in the following five parts:The first part reviews the researching background and significance of the topic, summarizes the current research perspective on this issue by literature review on the issue of domestic and international level, and limited some concepts'category during the course of the study in this paper; In the second part, we will first introduce the status of the world trade in services, and the status of China's services trade through the following four aspects: the developing trends, services industry structure, the deficit situation and the overall level. By comparing the development of China's service trade and the world's, we deduce still a big gap between them;In the third part, based on the backgrounds of the shift towards services in the international direct investment, we will illuminate global foreign direct investment in regional structure, industry structure and the way of access, and then conclude the development of foreign direct investment in China's service in the same aspects. All the above will be used to display the gap clearly, which tells us the small-scale of foreign direct investment in China's service sector, and the imbalance of regional and industrial distribution;In the fourth part, we will analyze the impact of FDI in service on China's service trade development, which can be limited to the promotion effects in theory, and the elaborate the way in which foreign direct investment promote the increase of the total amount and the optimization of structure of import and export trade, mainly driven by the development of offshore service outsourcing export, floating effect and capital effect to promote the development of China's services, thus to enhance the international competitiveness of services trade. The most important thing in the process of analysis is to use data to show that this catalytic role is still not clear that the contribution of foreign direct investment in services to the development of services trade still have much room for growth;In the fifth part, for the small size of foreign direct investment in China's services sector and the problems introduced in the fourth part, we will give a specific countermeasures to promote import and export volume and structure of services trade in China, such as the increase of attract foreign investment to services, developing services outsourcing business, a reasonable guide of foreign capital flow and so on.There are two main innovations of this paper: First, many scholars believe that the trade effects of foreign direct investment are complementary effects and substitution effect for a long time, while the author limit the effects of services FDI on services trade by analyzing the mechanism of these two means; Second, previous studies on the impact of FDI in Services on China's service trade is only for the approach articles the former to the latter, while the author analyzed through date that the foreign direct investment in services for the promotion of trade in services is inadequate.The inadequacies of this article are the missing data due to incomplete statistics on services trade, as well as China's legal system and regulations are not completely sound, which lead to inadequate statistics of different forms of trade in services, in addition, "China Foreign Investment Report", from which the main source of data come, is delayed to output, so a lot of data failed to be updated, and release the convince of this paper on these issues.