A Study On The Relationship Of China's Service Trade Structure And Economic Growth

With the emphasis of the global economy gradually transferring to the Service Industry, international trade in services has grown quickly since the 1980s, service trade structure has improved, and the proportion of traditional service has declined continuously, while the share of knowledge-intense service trade grows rapidly.However, Service Industry in China has long been in the secondary position and develops slowly. The value added of Service Industry only takes up 40% of the GDP, which is much lower than that of the developed country, and also the average level of the world. Under the influence of Service Industry's low level of development, China's trade in services develops laggardly, the quantum of trade in services is small, and service trade sector lacks diversity. Also, it has been in unfavorable balance in China's international trade for a long time and drops far behind the developed country. Aware of the importance of trade in services to the development and international competition ability of economy in the future, China's government has taken various measures to encourage developing trade in services and clearly put forward the policy of changing ways of international trade growth and striving to develop trade in services. At the same time, China abides by the promises for WTO and enhances the opening level in service market. All these mentioned above reveal that China's trade in services has come into a new developing stage.The main issue this thesis tries to discuss is the relationship between service structure and economic growth. Firstly, the thesis analyses the mechanism of service trade structure's functions on economic growth and demonstrates this functional relation by Chinese economic data from 1982 to 2006. Co-integration analysis shows that the two traditional sectors of service trade, transportation and tourism, promote China's economic growth, however, other sectors of service trade, because of insufficient development, contribute little to the economic increase. For a further study of other service trade sectors' functions on economic growth, this thesis chooses America, whose other service trade sectors develop fast, as a researching example. The result indicates that the development of other service trade sectors helps greatly with economic growth, which gives China theoretically and demonstratively a ground to vigorously develop new-born service trade sectors.