The Analysis Of The Bilateral Service Trade Competitiveness Of China-Japan And China-South Korea

Since the1960’s the development speed of the economic globalization is more and more fast, and the popularization degree of the Information and Technology is more and more high, the service industry’s important status in the world economy is being highlighted. In middle and late1980’s the developed countries had smoothly completed the industry structure adjustment from manufacturing to service, then the proportion of service industry in GDP in these countries all had reached or exceeded60%, some of those countries have even exceeded80%. This shows that the global economy has basically become service-oriented economy and the core of world trade has begun to transfer to service trade.In such a big background, The government of China, Japan and South Korea all begin to pay high attention to the development of service industry and service trade. The service trades of the three countries all develops rapidly, and the service trade scale has been continuously expanded. Japan service trade development is earlier than China and South Korea. The Japan service industry has become advanced with the strong support of advanced manufacturing industry. But Japan service trade development doesn’t match the development of domestic service industry and the status of the developed country. And Japan doesn’t follow the comparative advantage theory to export the technology intensive, capital intensive and knowledge intensive services. By comparing, we can see there are many similar points in the service industries and service trades of China and South Korea Firstly,the service industries of China and South Korea all develop late.Secondly,both of the service industry structures develop unbalancedly, which incline to develop the labor intensive and resource intensive services. But compared with China, the development of some service industries in South Korea are better and quicker. For example, the South Korea transport industry has reached the world’s advanced level. Since the reform and opening-up the development speed of Chinese service trade is quicker, the annual growth speed of Chinese service trade volume has reached18%, far more than those of Japan and South Korea. And the total amount of Chinese service trade had reached400billion dollars in2011,the development space and potentiality of Chinese service industry and service trade are still very large.At the same time, the bilateral service trade of China-Japan and China-South Korea all develop rapidly with the high development of Chinese service trade. According to the2011data, China is South Korea’s first service trade partner in Asia, and is Japan’s second service trade partner in Asia. The economic and trade relationships between China, Japan and South Korea are becoming more and more close. But the bilateral service trade of China-Janpan and China-South Korea always focus on the Intra-industry trade of transportation, travel, the other commercial services. But since2006the service trade of China to Japan has become the adverse balance of trade from the favorable balance of trade, the trade deficit amount is increasing year by year. The service trade of China to South Korea is also trade deficit, but the trade deficit is less than that of the service trade of China to Japan. This demonstrates that Chinese export advantage in the bilateral service trade of China-Japan and China-South Korea is decreasing gradually.Nowadays, Japan is urgeing to transfer some domestic industries.South Korea is eager to further expand the market. While China also need introduce the advanced technology and take advantage of the outer sources and market to help it to upgrade the industry structure. So the idea of establishing the free trade area between China, Japan, South Korea had been offered in2002. In recent years the governments of China, Japan, South Korea have negotiated many times and put forward to accelerate the establishment of free trade area. There is no doubt that the establishment of the free trade area would further deepen the economy and trade cooperation and bring opportunities and challenges to the three countries. But we can be sure that the opportunities are definitely more than the challenges. China could take the experiences of Japan and South Korea as a reference to further develop the service industry and service trade. We must also see the disadvantages in it. Maybe it would impact the Chinese weak high-tech intensive service and knowledge intensive service.In such situation, we should assess the development level of China, Japan, South Korea service trade and the bilateral service trade of China-Japan and China-South Korea. And we should know all the factors that influence the bilateral service trade of China-Japan and China-South Korea. These would have a very important practical significance both in eliminating the disadvantage factors that influence the bilateral service trade of China-Japan and China-South Korea if the free trade area of China, Japan, South Korea can be establish and in further improving and deepening the economic relationship of China-Japan and China-South Korea.This paper first analyzes the present situation of China, Japan, South Korea service trade and the bilateral service trade of China-Japan and China-South Korea. Then analyzes the competitiveness level of China, Japan, South Korea service trade by using a series of indexes. Though the competitiveness levels measured by the different indexes are different from each other, it can be seen that the competitiveness levels of the three countries have an certain distance in the whole, but the distance is not so large. Compared with the high development of service industry and service trade in US, UK and India, there is still a large distance in China, Japan, South Korea. So all the three counties should do their best to develop their service trade and improve the competitive levels.Then the paper analyses the whole competitiveness level and each item’s competitiveness level of the bilateral service trade of China-Japan and China-South Korea by TC index, and points out that the bilateral service trade competitiveness of China-Japan and China-South Korea all declines gradually, but the bilateral service trade competitiveness of China-South Korea is a little higher than that of China-Japan. On some service trade items such as Finance, Insurance, Proprietary rights fee and royalty, China lacks competitive advantage by compared with Japan and South Korea. Chinese service trade competitiveness relies on the support of the labor and resource intensive traditional service trade. The Emerging modern service trade have developed, but the whole development level is still low. Then the paper begins with Michael potter’s countries competitive advantage theory, and uses travel, transport, finance, Proprietary rights fee and royalty as examples to analyze the six factors which influence the bilateral service trade of China-Japan and China-South Korea, then gives suggestions on how to improve the bilateral service trade competitiveness of China-South Korea. This has an important significance on directing China on how to maintain the advantage service industries competitiveness level and improve the disadvantage service industries competitiveness level in the bilateral service trade of China-Japan and China-South Korea. Especially it has an important directing significance on pushing the establishment of free trade area of China, Japan, South Korea.