International Competitiveness Of Chinese Service Transactions

Since the 1980s, as the emphasis of world economy have been leaning to service industry,trade in services is developing rapidly in the process of integration of world economy.The meanannual increasing of import and export of the trade in services in the world exceed goods trade, andit becomes the importance part of the international trade.At the same time, the 《GeneralAgreement on Trade in Services》 which has been passed by Uruguay Round of GATT indicatesthat the content and the construction of the contemporary trade have been an importantdevelopment.China joined into the WTO at the end of 2001, it presuppose that Chinese servicemarket will merge into the international service market gradually. In the face of internationalcompetition, China should act pursuant to the multilateral rules of WTO to open the service marketand enter the lists which is the market of international service transactions.Therefore, it is of greatsignificance to study china's competitiveness of service transactions.Trading is the requirement for expanding the market of a nation's industry and the result of theintensive production. Trade service also has to follow this rule. With the deepening of thetechnology revolution, the productivity of labor has raised to a great extent in many countries(esp.developed countries). However, due to the limited domestic market capacity, it was difficult toachieve the economy of scale. Consequently, manufacturers from different countries were obligedto exploit the international market for survival and further development. Driven by the growinggoods trade and international investment, the relevant service industry and service trade has beengrowing rapidly, and the untreatably of service has reduced intensively (e.g. medical treatment andeducation etc.) attribute to the modern information science technology. As a result, the globalservice trade has changed profoundly in the previous 20 years.Western scholars studied the notion of international service trade first from the definition of"service". ,a French classical economist, defined the connotation and extension of service for thefirst time. In Plutonomy, he pointed out that immaterial product (service) was also the fruit ofhuman labor, the outcome of capital. Another classical economist Bastiat said in his famousHarmonious Economy : This (labor) is a kind of effort, to A, is his payout;while to B, it is hisdesire.After the World War Ⅱ,especially since 1960~1970s, service economy has developed quickly,and become a prominent phenomenon of the world economics. More and more scholars areengaging in the fundamental research of this domain, so the understanding of service is diversified.Now the widely used viewpoint by the economist is Hall's. In 1977 Hall proposed the concept ofservice which is recognized by the theorists: Service refers to, under the premise of reciprocity, thechanges result from the activity of human or the things which subordinates in the certain economicinstitution. The production and consumption of service carry on at the same time, that is to say thatunit change of consumer and production are synchronic and correspondent. Once service has beenproduced, it must be obtained by the customers but cannot be stored. In the middle 1980s,Bhagwati Sampson and Snape expanded Hall's concept one after another. They divided service intotwo kinds: One is the service that needs physical approach, the other is opposite. On the basis ofthis, Bhagwati divided service trade into four categories: (1) Both the consumers and producersdon't move (long-distance international service trade);(2) Consumers move to the producers'country;(3) producers move to the Consumers' country;(4) Consumers and producers move to thethird country. This classification is nearly consistent with the related definition in the future.Under the circumstances of the economic globalization, the competitiveness of Chineseservice trade is actually that of the international and home market. For one hand, whether Chineseservice products and program can infiltrate the international market and have large market share.For another hand, after the entering WTO and opening up the home market, whether Chineseservice industry can survive and develop in the fierce competition. No matter in what market, if wewant to enhance competitiveness, we must develop domestic service industry. Objectively speaking,we have the external pressure and internal motivation to develop our service trade. But subjectivelyspeaking, we need clear mind and practical strategy, and find a possible and effective way toenhance the competitiveness.According to the theory of tradable development, at the different stage of development, theimpetus of accelerative trade is different. At the initial stages, the developing country went shorts ofcapital and technology, and the impetus comes from the tradable development which is a vocationof having initial relative advantage. Initial relative advantage mentioned here infers to nature gift,e.g. abundant nature resources or labor resources. However, as this sort of products contains lowtechnology and low level, the room for developing is limited. As a result, it will face therequirement of changing power when trade develops to a high level. Entering into the second stageof trade add-value, the relation advantage will increase from nature gift to complex gift such astechnique, management and net-marketing. The evolution of relative advantage comes from thedynamic effect of this gift. The key to long-term dynamic competitive advantage is hoe to optimizeand mix the advantaged resources through macroscopic adjustment.This paper completely approves the concepts of GATS which is about the service transactions.On the top of, this paper analyzed international competitiveness of services transactions withPositive Analysis and analyzed the cause of weak competitiveness.The emphasis of this paper is how to improve the international competitiveness of Chineseservices transactions. The competitiveness of Chinese services transactions is weak, but maybe ithas a potential to develop with the external conditions getting from the WTO and the internalimpetus which is from the growth of Chinese economy.The countermeasure which we make andimprove the competitiveness of the service trade is: According as the theory of competition, theimpetus of trade which is the Comparative Advantage---high-level ComparativeAdvantage---Competition Advantage integrate with external environment and intrinsic impetus toimprove the competitiveness of trade in services.