Research On Determinants Of Foreign Direct Investment Flow To Chinese Services

Foreign direct investment mostly took place in manufacturing in the early time. In the 1980s, the focus of FDI in the world began to shift to services, especially the development of serving trade in recent year, which made FDI in services to develop quickly and made them to become the new engine of FDI. By the international compare we find out that FDI flow to Chinese services is relatively little and have a large gap between that in the world. Chinese services should take entering the WTO as a chance and grasp the opportunity to attract FDI actively and safely to promote Chinese industrial upgrade. With an object of FDI flow to Chinese services, the paper mostly studies its determinants.Firstly, analyze FDI theory in services and the actuality and the course of development of Chinese services using FDI.Secondly, analyze FDI flow to Chinese services in theory, and theresult includes: Now the ability of international competition of Chinese services is low, and must introduce into FDI to promote its development. Though FDI flow to services bring us not only advantages but also disadvantages, we can't refuse them for fear of a slight risk. We should avoid its negative influence and make most use of it. Now the proportion of FDI flow to services is low and there are many problems that badly prevent FDI from entering Chinese services in the course of introducing into FDI.Thirdly, analyze the determinants of FDI flow to Chinese services in demonstration. The paper does a regression on FDI flow to Chinese services with time serial analysis. The result shows that degree of opening, market scale, market potential, FDI in the secondary sector, labor cost, education, the level of big and middle urbanization, cumulative FDI in services and WTO are the import factors which influence Chinese services and some of them to introduce into FDI.Finally, give some useful suggestions about Chinese services introducing into FDI.