The Effects Of Financial Services Trade Liberlization On Economic Growth In China

As the rise of economic globalization,Liberalization of financial services trade becomes a global requirement. China has promised to completely open its financial market in 2006 after entering WTO. So the way of the openness in financial market, the level of opening and the impact on economic growth have already been urgent issues.We first review the past researches on the relation between financial services trade liberalization and economic growth, and explain that financial services trade liberalization promotes economic growth through financial growth based on the analytical model proposed by Francois and Schuknecht (1999). So we establish and investigate the Regression model of financial services trade liberalization, financial development and economic growth on the basis of Francois. Then we compare and analyze the present situation of financial services trade liberalization in China and Singapore. At last, using index of financial service trade openness FOI as the index of financial services trade liberalization, we analyze two models about financial services trade liberalization and financial development; financial development and economic growth, which based on the economic data from 1996—2009. The results of our research shows that: in China, there is a strong positive correlations between financial services trade liberalization and financial development, financial development and economic growth, which reveals that when open financial services trade in China, it is possible to facilitate economic growth through financial development. On the other hand, it can be seen from their Coefficient,The liberalization of financial services trade has more influence on financial development, comparing with the influence of financial development on economic growth. Consequently, the impact of China's financial services trade liberalization through influencing financial development on economic growth is very small.In the last chapter, we use Singapore as a model of state to find out specifically what level of china's financial services trade liberalization is, and can the growth effect of china's financial services trade liberalization always been there. We analyze the financial services trade liberalization in Singapore from Qualitative and quantitative aspects for three different stages. The result of our research shows that: it is not necessary to carry out the liberalization of financial services trade for the purpose of promoting economic growth. But for the purpose of deepening financial development, china can liberalize the financial services trade. However, the impact of financial services trade liberalization will be lower when the level of financial services trade liberalization is increasing. We can also find out: the level of financial services trade liberalization in china is so low that we can improve this level in the next years to promote financial development.