The Research Of Relationship Between Foreign Direct Investment And Services Trade Deficit

With the deepening of reform and opening up of China, the foreign direct investment FDI scale in China is more and more greatly, and go to the end of 2009, China physically makes use of FDI was amounted to 957 billion dollars, and has already become the most nation which makes use of FDI in developing country continuously for 18 years. But at the same time of the large-scale FDI inflow to our country, they distributed to industry seriously unbalanced, mainly focused on the manufacturing industry, and the quota that service industry has is less. At the same time, service trade of our country has been being the state of deficit, the international competitiveness of our service trade is very weak.For research the FDI's impact on the service trade, the text first to study Michael Porter's Competitive Advantage of the industry, and influenced the main factors of service trade competitive advantage are production factor, need condition, related and support industry development level, service business enterprise of structure and competition strategy and service trade development of opportunity and supports to service trade. Secondly, this text analyzed the condition of foreign direct investment and service trade in our country. Next the text according to the "diamond" model analyzed the path of FDI influenced service trade. Then the paper made use of economic data from 1997 to2009 by co-integration test and Granger test research the relationship between FDI, service-FDI and exports, imports and the deficits of service trade. Outcome, the FDI will expand the deficit and service-FDI will reduce the deficit. In the end, the paper puts forward a related suggestion.