The Impact Of Economic Openness On The Service Industry Structure In China

Since the reform and opening，service industry development has become an important engineof China’s economic growth“.Report on the Work of the Government of2011”has pointed out thatwe need to actively develop life service and develop and upgrade the software industry，Thissuggests that the government of China puts forward higher request to service industry structure.Generally，researches on changes of service industry structure only focus on domestic factors, andlitter involve the factors of international environment. And economy and opening is an importantdriving force to upgrade service industry structure. Taking this into consideration，for the purposeof exploring a new path to upgrade the structure of the service, the paper researches the impact ofeconomic openness on the service industry structure in china in the background of current globaleconomic integration. Based on the related research on the structural changes on services、economic openness and service development and so on, the paper builds the mechanism of theimpact of the economic openness on the service industry structure from three perspectives: Thetransaction costs, the structure of demand, the structure of demand of supply. Then, the paperestablishes an empirical model and adopts the relevant data between1990-2009years in China andrespectively verified the impact of economic openness on the proportion of service within fourareas: circulation services, producer services, consumer services and social services.Through the empirical，the paper gets the following conclusions:(1) Increased trade opennesswill significantly reduce the proportion of the circulation services and increase the production ofsocial services, but has no significant effect on the proportion of other two sectors.(2) Increasedinvestment openness will significantly increase the production of circulation services and consumerservices, and significantly reduce the proportion of social services, while no significant effect onproducer services. Thus the paper finds that the improvement of investment openness has a limitedsimulative effect on upgrading China’s service structure, while trade openness is yet haven’t playits role in upgrading the structure of services. Then the paper finds the reasons from four aspects(the trade in services, the intermediate demand, the final demand and the input structure).Combining with mechanisms, empirical results and cause analysis, the paper advance some policyproposals to upgrade the Service Industry Structure in China: to further increase investmentopenness of services, to enhance the competitiveness of trade in services, to accelerate upgradingindustrial structure, to perfect the income distribution system.