Direct Foreign Investment In China's Service Industry

In recent years, more and more foreign international invest have changed frommanufacturing industry to service industry. The service industry became the mainregion of the foreign direct investment, and it develops rapidly all over the world. Atthe same time, the developing countries have been the important regions to attractforeign direct investment all over the world. In the mid-1980s, the foreign directinvestment flows from developing countries was only6percent, while the flowsincreased to11percent in the last five years in the1990s. By the2011, the foreigndirect investment in developing and transition economies attracted more than half ofthe global foreign direct investment inflows.In the World Investment Report2013, it shows that the foreign direct investmentattracted by the developing countries were more than the developed countries which isup to52percent of the world foreign direct investment. In contrast, the foreign directinvestment flows to the developed countries have declined32percent reaching561billion dollars. In the economic crisis of2008, the service industry has become thefirst one to bear the brunt of the foreign direct investment, and it has gone up in recentyears. The foreign direct investment flows of the main service industries, includingbusiness services, financial services, transportation, communication, the utilities andso on, have declined on some way. Therefore China as both the host country and theinvest country should grasp this important opportunity to learn from other countries inforeign direct investment of service industry in order to promote the development ofChina’s service industry and the foreign direct investment.In the foreign direct investment of various industries in China, more and moreinvestment flows from the manufacturing to service. And it reached50percent inChina foreign direct investment in2010for the first time. In this way, to do researchon China foreign direct investment in service is a significant issue.In this paper, we start with the basic theories in service foreign direct investment,and study the foreign direct investment classic theories to analyze the applicability to service industry. And at the same time, the foreign direct investment theories appliedto developing countries are analyzed here. Then we focus on the status and thefeatures of the service foreign direct investment, and based on it I pay attention to theservice foreign direct investment of China. What is more important is the inspectionservice from the perspective of the empirical effects of China foreign directinvestment to make sure the factor affecting service foreign direct investment. Alongwith that, we considering the economic effects of foreign direct investment in Chinaservice industry, then make suggestions to the further development of China serviceforeign direct investment.