The Research On The Relationship Between The Foreign Direct Investment In Services And The Growth Of The Service Industry In China

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. China has promised to open the service industry gradually when she entering into WTO. Since 2001, more and more multinational service companies enter into Chinese service market, ranging from financial service, logistics, telecommunication to law service, accountancy, management, public relations as well as other business service industries.In the context of international service industry transferring into China and the deepening open of Chinese service industry after China's entering into WTO , based on the theory of international investment. Description of the status and trends of the Chinese service sector use of Foreign Direct Investment. Analysis the causes of the rapid development of China's service industry, From the rise of global outsourcing of services to developing countries and developed countries, the Chinese market more attractive to foreign investors two-pronged, Analysis the inevitability and feasibility the foreign investment flows to China . Focus on the Foreign Direct Investment how to impact the development of China's service industry, From the capital effect, technology spillovers, employment expansion, improve the quality and efficiency of the service sector and the environmental effects, showed the positive impact of the services Foreign Direct Investment. From the impact on the domestic services, the risk of financial and macroeconomic management, the risk of domestic service enterprises loss of high-quality personnel, the risk of the technology monopoly and the monopolization of the market, showed the challenges of the services Foreign Direct Investment to China's service industry development. On this basis, use of Cointegration test and Granger causality test method, on the data from 1984 to 2005 made Empirical Study on relationship between China's service industry use of Foreign Direct Investment and the growth in the service industry, The results showed that: Exist use of Foreign Direct Investment to the service sector growth Granger unidirectional causality. By capital effect, technical effect, trade effect, employment effect and system effect etc as explanatory variable, further analyzes the way by which the Foreign Direct Investment effects growth of the industry of service. The use of trade expansion model of the form of gravitational, Various effects on the combined effect, Taken from the services FDIâ†'Variable channelsâ†'Services growth method. The technical effects, the employment effect and the capital effect was the most significant growth of path. Finally, Base on combining qualitative and quantitative analysis of the text of the conclusions, give some useful suggestions about services introducing into FDI.