Comparative Study On The International Competitiveness And Influencing Factors Of Service Trade Between China And India

With the transformation of world industrial structure from industrial-oriented to service-oriented,service trade has become more prominent in global trade.It is not only seen as a new engine to drive global trade growth,but also seen as the focus of global trade competition in the future.China and India are both important nations for world services trade,and both countries have experienced rapid development and get great achievements in recent years.India chooses service-oriented development path in the process of economic development and has a better industrial foundation.China now is also actively promoting the optimization and upgrading of industrial structure to realize service-oriented economy.Therefore,the competition in international trade between the two countries will be more concentrated in the field of service trade,which requires us to have a profound understanding of competitiveness between this two countries’service trade.With the deepening of international division of labor,the trend of production fragmentation also appears in service industry.Production is divided and reorganized over the world which creates global service value chain.Now more and more countries have become a part of the chain and participate in global service trade.Based on this context,just like goods,service also appears international attributes rather than national attributes.So traditional statistical approach based on border and gross value has some defects,and the new approach named trade in value added statistical method can reflect a country’s real trade situation by using Inter-Country Input-Output tables.It provides new ideas and perspectives for us to understand the problem of service trade and trade competitiveness.Based on the trade in value added statistical method,this paper makes a comparative study and analysis on the service trade and trade competitiveness between China and India.Firstly,comparing the two statistical methods,it can be seen that the traditional statistical approach underestimates the scale of China and India’s service exports.And due to the different trade pattern and trade value composition,China is underestimated even more serious.Secondly,from the perspective of trade in value added,China’s export scale is larger than that of India,but there are still gaps in export growth rate and export structure optimization compared with India.And from the perspective of export region,there are competitive relationships between the two countries’various services to some degrees.On this basis,by using the improved international market share index(IMS~D)and the revealed comparative advantage index(RCA~D),this paper quantifies and compares the trade competitiveness of the whole service industry and sub sectors between China and India.But concerning different indicators,there are some differences.IMS~D index shows China’s service trade is more competitive,but from the point of RCA~D index,India has a competitive advantage.Comparing these two indexes,it can be seen that the IMS~D index measures one country’s service trade competitiveness from the perspective of scale,while RCA~D index considers the trade competitiveness from the level of development,so China’s service trade is also facing the situation of being large but weak.Therefore,how to improve the international competitiveness of service trade is an important problem that needs to be solved in the process of service trade development in China.Next,using the mathematical model,this paper analyzes the factors which will affect the service trade international competitiveness of China and India.The results show that China’s service trade competitiveness is affected by domestic consumption capacity,manufacturing exports,the level of national service industry and service trade openness,while India’s service trade competitiveness was only affected by human capital,domestic consumption capacity and service trade openness.So there are some different characteristics of international service trade between the two countries,and India’s developing process provides us both experience and warnings.Finally,based on the above analysis,this paper makes six recommendations to improve the international competitiveness of China’s service trade,including strengthening talent support,fostering domestic consumption capacity,promoting the harmonious development between merchandise trade and service trade,consolidating national industrial base,expanding opening up and actively promoting the development of service outsourcing.