The Research On The Relationship Between Financial FDI And China’s Financial Services Trade

Currently, with the accelerated process of global economic integration, Servicesincreasingly become the place where the foreign investment in the international market areinterested in. The opening up of China’s service industry constantly, is attracting a lot offoreign direct investment into the market. The financial sector as an important part of theservices is becoming the focus of foreign direct investment. With the deepening of China’sfinancial reform, as an important area of trade in services and international exchangemarkets, the development of trade in financial services are more closely watched infinancial markets. Because the opening and development of trade in financial services arelate, and product competitiveness is weak, and structural development is unreasonable, asthe gradually expand use of China’s financial services sector of foreign capital, manyproblems have also exposed. Therefore, this paper will be to explore the major theoreticaland practical problems, such as the relationship between the financial FDI sector andfinancial services trade, and put forward corresponding countermeasures and suggestionson how to use the positive effects of FDI in the financial services industry to promote thedevelopment of trade in financial services, and it has important implications for the healthydevelopment of China’s accelerating trade in financial services sector.Firstly, the relevant literature and research has been combing and summarized, and itprovides a theoretical basis for the direction and guidance of this writing. Then, the articleanalyzes the use of FDI in financial sector in developing countries and in China, andcompares the results to analyze the use of the domestic financial sector FDI absorption thestatus of characteristics and trends, and the factors affecting its inflows and problemsencountered. Then through the development of China’s financial services trade analysis,researching the background and conditions for China’s financial services trade provided bythe foreign financial services trade, and then combines the current development of trade infinancial services, the size of the structure, constraints, etc. to discuss the development of trade in financial services. Meanwhile, this paper analyzes based on the traditional theoryof international trade impact of the financial sector FDI on trade in financial services,based on the financial sector FDI speculative motives, clarifies the relationship betweenFDI and financial sector of trade in financial services, and it separately discusses thedifferent effects on the financial services (banking and securities industries) and insuranceservices part. It uses the2003-2012financial sector total import and export volume of FDIand trade in financial services, insurance and finance part of the import and export part ofquarterly data to do the empirical analysis. Through empirical testing it finds that betweenthe FDI in financial sector and the financial services trade exists positive relationship, andthere is lag of the impact of FDI in financial sector on the financial services trade. It alsofinds that FDI in the financial sector goes into the market no longer for dominating themarket, but for the purpose of export-oriented, and the insurance services imports aremainly affected by a large number of ancillary insurance services accompanying affectingtrade in goods, and the learning ability and innovation ability on the relevant advancedtechnology and experience which are brought in by the FDI in financial sector are week.Finally, based on the conclusions of the theoretical and empirical analysis, the articleproposes policy recommendations on how to make better use of the FDI in financial sectorto promote the development of financial services trade and attracts foreign investmentthrough the development of financial services, such as trade liberalization.