The Influence Of FDI In Non-financial Service On The Evolution Of The Host Country’s Industrial Structure

United Nations Conference on Trade and Development (UNCTAD) indicates that the current international direct investment is now shifting towards service from manufacture. In the trend of economic globalization, this change has an important impact on the industrial structure for countries. As an important branch of FDI in services, FDI in non-financial service increases quickly with FDI in service increases rapidly. Since its investment fields contains productive service industry mostly, and then FDI in non-financial service has a more representative impact on manufacture and service. At the same time, a revolution in the service industry arises around the world. This means that a new kind of development mode, the service driven mode, appears. No longer is unique industrialized mode of development. Discussion on the influence of FDI for the two kinds of countries’ industrial structure will be more realistic significance.This paper is researching how FDI in non-financial service affects on the evolution of the host country’s industrial structure. This paper’s theory basis is classical theory on the FDI and host country’s industrial structure evolution. Its background is the development trend of global FDI in service. This paper establishes a single national static model to directly explain how FDI in non-financial service effects the development of the host country’s industries. And then it shows the mechanism of FDI in non-financial service and the industrial structure of the host country with logic ways, which includes manufacture-driven countries and service-driven countries. This paper also selects some manufacture-driven countries and service-driven countries, and uses the sample data to do Empirical analysis. The Empirical analysis tests the influence the influence of FDI in non-financial service on the evolution of the host country’s industrial structure. And then this paper compares the industrial effect of manufacture-driven countries to service-driven countries, and analyses the possible cause of these differences. Besides, based on China’s difference of regional economic development, this paper proposes some possible ways of policy reform.The main conclusions are as follows:1. FDI in non-financial service has great and positive influence both in manufacture-driven countries and service-driven countries. It has a greater effect on services in short time. However, the effect on manufacture will gradually catch up even more than the effect on service. Besides, the influence of FDI in non-financial service is more significant in service-driven countries.2. The phenomenon is more complex and interesting in the evolution of the industrial structure. In manufacture-driven countries, FDI in non-financial service actively promote the expansion of service industry in the industrial structure level. But it makes the "shrink" of manufacture industry. In service-driven countries, the expansive effect on manufacture industry is negative and non significant. It is a pity that the expansive effect on service industry is unknown.3. Due to different development modes and different development phases, two kinds of countries have different resistance of inflation. Inflation causes the false appearance that the industries are growing in manufacture-driven countries. And it also inhibits the actual expansion of industries. In service-driven countries, it inhibits the industrial growth, and causes the false appearance that manufacture and service industry are expanding in the industrial structure level and even promotes the upgrading of the industrial structure.