Research On The Impact Of Human Capital To The International Competitiveness Of China’s Service Trade

The development of services to create a huge social and economic value is animportant feature of modern economic development. Trade in services and serviceindustry cannot be separated from each other. In recent years, trade in services as anew national economic growth pattern, to some extent; ease the downturn caused bysluggish trade in goods after the financial crisis. According to statistics, the world’stotal import and export service trade volume is$8.965trillion in2013, accountingfor20.5%of total world trade, and up6.1%from2012.Under the promotion ofinformation technology, Modern trade in services is moving from traditional naturalresources and labor-intensive to human capital and technology-intensive road. Withthe change of the pattern of modern trade in services, the human capital tends to playa more important role in knowledge-intensive service industries. Therefore, researchon the impact of human capital to the international competitiveness of China’sservice trade has economic significance and practical significance.In this paper, empirical analysis and normative analysis are adopted to illustratethe chosen subject. The study includes the following sections: First, we make a moredetailed overview about the basic theory of the international competitiveness of tradein services, and summarize the domestic and international viewpoints and methods.In this paper, combined with the concept of modern scholars and developmentsituation, we defined the international competitiveness of trade in services as overallexport capacity and foreign exchange earnings of our service products which canobtain the market share and trading profits. Meanwhile we explained the concepts ofhuman capital, measurement and the influence mechanism of the impact of humancapital to the international competitiveness of service trade.Secondly, by way of comparative analysis of the data shows the status quo ofChina’s investment and development of human capital, we found that:(1) China hasa growing number of labor transfer to the tertiary industry. Although the laborforce of higher level of education occupied a higher proportion in knowledge andcapital-intensive industries.，but the relative lack of supply level of knowledge and capital-intensive service industries, widespread education levels among regions andindustries are uneven, to achieve coordinated development of human capital, theeducation system needs fundamental change. Further analysis can be obtained，interms of investment of human capital, the overall financial education funding isinsufficient; There is no optimal allocation of "pyramid" type.(2) To evaluate theinternational competitiveness of China’s trade in services objectively, we choose thedisplay index of import and export to compare those with the United States. Wefound that China’s service trade lower market share and continue to expand the scaleof services trade deficit, the competitiveness of significant differences between thevarious service industries. Traditional trade service industries affected by theinternational financial crisis, the situation is not optimistic. Some knowledge andcapital-intensive industries have begun to take some of the internationalcompetitiveness, but still a large gap contrast with the world leader.(3) The reasonwe can see through human capital, we over reliance on low labor cost advantage,lack of professionals make the competitiveness of service trade which be supportedof human capital low, resulting in the insufficient development and upgrade power ofknowledge-intensive industries.As to the empirical analysis, the paper use the Cobb-Douglas productionfunction model which added human capital factor for the empirical basis, andestablished the Var model to the unit root test, Johansen cointegration test, Grangercausality test, impulse response and variance decomposition. The main conclusionsare: Our human capital stock for each1%increase will make services exportsincreased7.76percent. Each1%increase in physical capital, services exports willincrease0.32percent. Human capital and physical capital services exports areunidirectional Granger causes. The labor force every1%increase in services exportsmay be reduced0.98%, showing a reverse correlation. The results of the empiricalanalysis can be conclude that human capital can bring significant and stable effect onthe continued growth of competitiveness of China’s service trade in a long term,highest on the contribution of services exports, and surpassing the growth of materialcapital. For services exports contributed the highest, exceeding the physical capital brought growth and contribution. While labor force lever of tertiary industry is stilllow, we can’t promote the development of China’s service trade in the long runwhich is consistent with our previous results of the data analysis.Finally, this paper combines the US service trade development with nationalrealities of service trade, and put forward policy suggestions about how to promotecompetitiveness of China’s service trade driven by human capital. The policyrecommendations are summarized to this:(1) Strengthen investment in education andresearch and development, the rational allocation of expenditure structure;(2) Focuson the training of professionals, improve human capital management system;(3) Thecreation the environment of intellectual property protection, promote capability ofindependent innovation.