The Measurement Of China’s Service Trade Barriers And International Comparison

Since the1990s, with the adjustment of industrial structure and the proportion of service in the national economy rising, service is becoming an important force to promote the growth of a country’s economy. The development of service industry led to the increased proportion of service trade in world trade. As the main exporter of service, developed countries show comparative advantages in many service sectors. They actively advocate the negotiation in service trade to promote service trade liberalization and expand export interests. Under this background, in the negotiation of Uruguay round in1986service trade became the negotiation issue for the first time. In1994the General Agreement on Trade in Services reached and it became a normative framework agreement of service trade. Since then, service trade liberalization is becoming an issue in the regional trade negotiations.However, for political and cultural reasons, or with the economic considerations, there are still a lot of barriers to trade in services. These barriers constitute the real obstacles. As they are mainly in the form of policy measures, domestic laws and industry standards, it is of great significance to quantify these measures. From the perspective of trade negotiations, it helps to provide the basis for prudent opening of service sectors. For the purpose of economic analysis, it helps to assess the economic influence of barriers so as to provide guidance for liberalization.This paper mainly measures trade barriers in China and provides international comparison.There are mainly seven parts. The first chapter introduces the background, the structure, research methods, possible innovations and shortcomings of this paper, and also reviews literatures of service trade. The second chapter gives the definitions of some concepts and reviews methods of measuring service trade barriers. The third chapter mainly analyzes characteristics of the global trade in services and the competitiveness of China’s service trade. The fourth chapter uses the gravity model to measure tariff equivalent of China’s service trade barriers and makes international comparison. The fifth chapter measures trade barriers in China’s banking service. The sixth chapter analyzes the economic effect of service trade barriers, outlines the various ways of service trade liberalization and summarizes China’s participation in the regional trade agreements related to service. The last chapter summarizes the main conclusions, and puts forward relevant policy suggestions.Through our analysis, we get the following conclusions:the comparative advantages of China’s service trade remain in the labor-intensive and resource-intensive sector. The comparative advantage in capital-intensive sector gradually strengthens. The weakness in knowledge and technology intensive sector is obvious. The competitiveness of service trade is in accordance with resource endowment in China and economic development stage. Improving the trade competitiveness depends on accumulation of capital elements and improvement of technology. International comparison shows that disadvantages in finance, insurance, royalties and licensing services are obvious.Using gravity model to estimate the tariff equivalents of service trade barriers, it shows that barriers in developing countries such as Russia, Brazil, India remain high. Barriers in Asian countries such as Japan, South Korea are low. Hong Kong shows high barriers. As a developing country, the overall level of service trade barriers in China is lower than other developing countries in sample and similar to some developed countries.Through the analysis of trade barriers in banking service, we find that in China the limitation degree in cross-border consumption is high. The limitation in commercial presence has been gradually reduced. Restrictions remain in the requirements of foreign equity of joint venture banks, the requirements of establishing branches and the provisions of setting up commercial institutions for foreign banks.Reform of domestic service industry and negotiations of service trade are the main ways to liberalize service trade. It is necessary to deepen the reform of key sectors to open service market. The ultimate effect is closely related to the introduction of competition, prudential regulation, the liberalization order of four different modes. Compared with multilateral trade negotiations, regional trade agreement has increasingly become the important way of service trade liberalization for its rationality of mechanism design. In China, participating in regional trade agreement is becoming an important way to open service sectors.