Global Services Fdi Trends And Countermeasures

In the last decade, most of the world economies, both developed and developing, have experienced a significant rise in the share of service sector in their GDP. With the service sector becoming a main engine in GDP and FDI growth, the competition in world market will be inevitably focused on service sector. The service sector in China is on a low level as a whole. The third industry remains to be a bottle neck in National Economy. With China implementing its WTO obligations in finance, telecommunication, tourism, education and advisory sector, foreign enterprises will get more chances in China's market. Getting a correct understanding of trend in FDI in world service sector, rationally utilizing FDI in this area, leading it to serve the economic development in China with consideration to its own realities, becomes a serious and urgent task for Chinese government.This paper, starting from deciding elements for Multinational Enterprises FDI and economic effects of FDI in service sector for host countries, analyzes the developing trend in word service sector and experiences of India in opening its service sector, makes policy suggestions for utilizing FDI in service sector with consideration to present situation in China. The thesis consists of five parts.Part one focuses on related theory research in FDI in service sector. After analyzing the reasons for MEs FDI , the applications of theories of FDI in manufacturing sector to service sector, the economic indication of FDI in service sector for host countries, the paper suggests that in the process of international transfer in service sector, especially in producer's service sector, development and agglomeration of manufacturing industry has become an important location advantage of host country.Part two analyzes the developing trend in FDI in world service sector, points out that there are great changes in scale, structure, pattern and nature of FDI in world service sector. Part three focuses on present opening condition of service sector in India and influence of opening up to its development and makes a conclusion that opening up stimulated the development of service sector in India, but India's service sector remains fragile due to its underdeveloped manufacturing industry.Part four analyzes the realities and developing trend of China's service sector, its advantages and disadvantages for utilizing FDI, points out that the rapid development and agglomeration of manufacturing industry is an important location advantage for utilizing FDI.Part five makes policy suggestions for utilizing FDI in service sector. China should continue to make progress in its investment conditions, improve the production and consumption of its service sector, at the same time implement new policy in utilizing FDI in service sector, aiming at enhancing interaction and agglomeration of industries, gives full play to positive effects of FDI in service sector to China's economy.