International Comparison Of Subsidies Of Trade In Financial Service And Its Enlightenment To China

U.S. financial crisis of 2008 damages world's financial sector, which draws all world's attention to rethinking the financial liberalization and protection, financial stability and development. From the perspective of the national economic and financial security and the vulnerability of the financial sector itself, every country has taken some appropriate safeguards during opening its national financial sector, and the government subsidies are the most common approach, which has important practical significance for protecting and promoting the development of national financial sector. By comparative analysis of the major economies' subsidies on the trade of financial service, combined with China's reality and on the basis of not contrary to WTO relevant principles, this paper provides further optimizing recommendations for China's subsidies of trade system in financial service. The paper consists of seven chapters.ChapterⅠ:Introduction. This chapter mainly introduces the background and significance of this research, defines the relevant concepts, and clears the research frameworks, contributions and weaknesses.ChapterⅡ:Literature Review. This chapter summarizes in three aspects. Firstly, review the research of the subsidies of trade in service. Secondly, review the research of subsidies of trade in financial service, including the fields and characteristics, measures and effects of subsidies in financial service trade, anti-subsidy research, and the research of subsidies in financial service trade negotiation. Thirdly, review the research of China's subsidies of trade in financial service Existing. research has focused on the study of the subsidy in service trade, lacking systematic study of specific areas, such as financial services. This is the entry point of the paper.ChapterⅢ:Necessity Analysis of Subsidies of Trade in Financial Service. The chapter analyses the necessity of subsidies of trade in financial service from the perspective of internal and external factors. The external factors include that the financial sector has strong economic externalities, the competition of international financial service intensifies, cyclical fluctuations in the economy cause financial crisis, and that the international law of subsidies of trade in financial service exists gray area. The internal factors include the inherent requirement to financial fragility, the requirements to prudential supervision of financial sector, maintaining healthy development, and protecting domestic infant industry. The necessity analysis provides theoretical points for the paper.ChapterⅣ:GATS and Regional Trade Agreement on Subsidies of Trade in Financial Service. This chapter introduces GATS on Subsidies of trade in financial service, including definition of financial service and subsidies of trade in financial service, the annexes of GATS on financial service, and the relevant principles and obligations of impacting the subsidies of trade in financial service. In addition, the chapter sums up existing regional trade agreement on subsidies of trade in financial services, so as to providing a guarantee of institutional background for the research.ChapterⅤ:Subsidies of Trade in Financial Service and Comparison in Major Economies. This chapter researches the subsidies of trade in financial service in U.S., European Union and Japan, including the specific measures of financial sector assistance during the financial crisis, and compares the similarities and differences of the three major economies. The similarities include that the regime of law on subsidies of trade in financial service is sound, the measures of subsidies of trade in financial service are flexible, including tax incentives, direct grants, capital injections, preferential loans or guarantees, public funds etc., the policy objectives of subsidies of trade in financial service are diversified, involving social, economic, political, cultural and other aspects. The differences are as follows. Firstly, the background of subsidies is different. U.S. usually adopts the subsidies when the financial crisis especially the banking crisis happens. EU implements the subsidies in the background of realizing financial service integration, while Japan developed its financial service with a strong color of subsidies at the very beginning. Secondly, the purposes of subsidies of trade in financial service are different, U.S. usually for preventing, controlling and assisting financial system risks, while EU for realizing financial service integration and enhancing the international competitiveness, and Japan for supporting and enhancing the development of domestic financial service. Thirdly, the effects of subsidies of trade in financial service are different. U.S. focused on short-term relief effect in the past, but the financial crisis still occurs in the long run. The effect of state aid in EU is stable, which progressively improves the internal financial integration and liberalization. While the early results of subsidies in Japan is positive, but with the development of economy, excessive subsidies raises many problems. In addition, the three major economies are in common on relieving financial crisis, but the relief policies have focuses. By comparative analysis in this chapter, this chapter draws the above conclusions, which provides enlightenments for further optimizing China's system of subsidies of trade in financial service.ChapterⅥ:China's subsidies of trade in financial service and problems. This chapter mainly introduces China's status quo of financial service and trade of financial service, analyses the status quo and problems of subsidies of trade in financial service. The problems are as follows. Firstly, the principles of China's subsidies of trade in financial service are not strong. Secondly, the statistics system of China's subsidies of trade in financial service is not good. Thirdly, the regime system of China's subsidies of trade in financial service is not sound. Fourthly, the measures of China's subsidies of trade in financial service are lack of flexibility. This chapter is one of the most key ones, which gives clues to solve these problems.Chapter VII is for the policy recommendations. This chapter learns the experiences in subsidies of trade in financial service from U.S., EU and Japan, combined with China's reality, and provides how to further optimize China's subsidy system of trade in financial service from the institutional guarantee and operational and other aspects. Firstly, clear the principles of subsidies of trade in financial service on which China should insist. Secondly, improve the related statistics system of subsidies of trade in financial service. Thirdly, modify the regime system related to subsidies of trade in financial service. Fourthly, select appropriate measures of subsidies of trade in financial service.