English Proficiency And China’s International Trade In Services

China started late on Economics of language, and the study of language as economic variable is basically focused on the analysis of the economic benefits generated by language as human capital, language policy and language planning, etc. However, the research on the relationship between language and international economics is far from enough. Therefore, this article aims to explore possible relationship between language and international trade. The language barrier, the fact that different countries have different native languages, has been documented in numerous studies as reducing international trade. This paper investigates the possibility that trade partners with no common native language will overcome the language barrier by communicating in a non-native language. In today’s world English is the leading candidate to play this role of a lingua franca. By constructing and then employing a new measure of English proficiency covering I long Kong, India, Japan. America and the European Union from2005to2009, we show that the ability to communicate in English has a strong effect in promoting trade especial in services, and the results are more significant in import than in export. Comparing the research between China and India, we find that an acquired proficiency in English can mitigate the impact of historically determined language barriers. Consequently, it is necessary and crucial to popularize English education and improve the use of English skill under the background of economic globalization.