The Factors Of FDI In Chinese Service Industry

Foreign direct investment has become a worldwide concern. The world total direct investment has climbed steadily after 2003 and will be expected to exceed the highest level of 2001 in a few years. Service industry is one of the most important. Currently World Services external direct investment showed the following characteristics: 1. the proportion of service industry kept increasing while Global foreign direct investment rise 2. The sources of service industry direct investment trend balance. Developing country became a new growth. 3. the position of multinational companies in the international direct investment became more important. Asian services TNCs become an important source of direct investment; 4. Liberalization of services foreign direct investment was evident.On average, services foreign direct investment has already occupied two-thirds of total world foreign direct investment inflow and outflow. It is inseparable of the industrial structure adjustment and the enhanced services. We should be able to see that with the deepening of Chinese reform and opening , Chinese service industry has gone beyond the traditional industries of China's foreign direct investment, as follows: 1. Services exceed the mining and manufacturing sectors, which are the traditional leading industries of Chinese foreign investment; 2. the investment to traditional tax havens increased significantly, 3. multinational corporations of Chinese service industry became large; 4. Chinese service foreign direct investment is regional obviously, as to choose adjacent countries; 5. following the evolutionary process of World Services direct investment, Chinese service foreign investment transfer to a high degree of monopoly. With the strengths of traditional industries like labor export and chemical plant keep growing, Information and communication, high-tech industries, real estate and integrated Group also achieved excellent foreign direct investment performance.We can remain optimistic attitude to Chinese foreign direct investment, particularly foreign direct investment in the services sector in the next few years. It is because: 1. Mining and energy industry are eagerly seeking overseas resources to reduce tremendous pressure on the domestic supply; 2. Business services will be maintained existing strengths, real estate, transportation and other emerging industries Rise 3. At present, the rewarding of Chinese service sector foreign direct investment is great, it will excitated Chinese relevant industries foreign direct investment.Most of the traditional theory is applicable to the manufacturing sector and developed countries, there are not enough theoretical research about developing countries service foreign direct investment, but on the basis of traditional theory we can process the applicability of Chinese service industry research. oligopoly response theory, the compromise theory and invest in the development stage theory can partly explain why a developing country as China foreign direct investment is necessary, also the reason Chinese service-related industries and a micro-enterprises foreign invest directly The factors are confirmed through the analysis of theory and services foreign direct investment: market size, potential of economic development, the wage level, export, commercial presence, cultural differences and geographical impact. Commercial presence, cultural and geographical differences can not be measured. It could not make a ideal linear equations through EVIEWS analysis factors data of 20 countries in 2000 and 2001 because of differences in the magnitude of data. Therefore, it has to specially and specifically analysis different stages of development of countries.The US and Japan represent developed countries. A large market size , smooth economic development, high exports form China. But for its domestic market has matured, strong commercial presence, higher manpower costs, cultural differences and geopolitical strangeness the investment from Chinese service industry is not so much.Hong Kong represents newly industrialized countries. The geographical and cultural of those country are very closed with China, or by the impact of China, there are smaller resistance for Chinese enterprises directly invest in these countries. there are frequent trade between China and those country; at the same time After more than 10 years rapid development in these countries, though the domestic market capacity was not as developed as developed countries, but they have also developed commercial presence of a certain size, but compared with developed countries both in quantity and competitive power there still exist absolute superiority; rich human resources, high costs, but its overall quality is also high, can reach a higher cost-effective. This type of countries can act as a key of Chinese service foreign direct investment, in which Chinese enterprises can learn advanced management models and market development experience at the same time strengthen their forces in the foreign direct investment.Developing countries and regions represented in Thailand, the domestic market capacity of these countries are smaller, the economic growth rate is very fast, close political relationship with China, Chinese primary products major exports states, weak commercial presence. Currently, this type of state is the most important target country of Chinese service industry foreign direct investment, and will maintain this momentum.Against such a situation, China should take the following measures to boost Chinese services foreign direct investment: 1. Specialized offices of external investment management institutions, strengthening macroeconomic control and guidance; 2. Speed up the legislative progress of foreign investment; 3. Developed investment policies enabling enterprises to conduct cross-border 4.improving and perfecting of overseas-invested enterprises information services; 5. increase their core competitiveness; 6. vigorously train personnel engaged in foreign investment.