Empirical Research Of Factors Affecting China's Service Trade Competitiveness

Service industry has gradually won the dominant position in global economy.The development level of the service industry in a country is the basis of the servicetrade, and the status of the service trade in a country is the international reflection ofthe development level of its domestic service industry. The world’s major developedcountries have started to transfer their economic barycenter to service industry sinceearly1960s, and the proportion of global service industry in GDP exceeded60%in1990. Information technological revolution marked by computer technology enablesinformation industry, telecommunications industry and other services industries tohave accomplished their qualitative leaps in an accelerated manner; it also enablesservice industry to step on the world stage in the form of international trade.For a long time, because of historical reasons in the environment both home andabroad, the status of Chinese service industry in national economy has never beenvalued as it should be. The development of service industry seriously lags behind interms of both infrastructure and relevant standards, so that it has become a puzzlewhich restricts Chinese economic development. With the globalization as well as thearrival of the transition period after China’s entry to WTO, China will graduallyaccelerate its pace of lowering the market entry barrier, so as to open up the market ofservice industry step by step, which will bring severe challenge to the development ofChinese service industry, thus affecting the international competitiveness of Chineseservice trade. Therefore, analyzing and evaluating the competitiveness of Chineseservice trade and its influencing factors can effectively provide theoretical basis forincreasing its competitiveness.First of all, this paper defines the concept and classification about service tradeas well as the interpretation for the competitiveness of service trade internationally.Based on this, the paper also analyzes the status quo of the overall service trade in the world as well as the status quo of the service trade in China.This paper mainly selects international market shares indicator (P), net exportrevealed comparative advantage index (NERCA)，trade competitive index (TC) andservice trade openness (TIS) index as well as abundant economic data to analyze theconditions of the competitiveness of Chinese service trade. Eventually, it concludesthat the competitiveness of Chinese service trade lacks of comparative advantage.Taking Porter’s Diamond Model as the basic model, this paper carries outempirical analysis by selecting human capital, the development level of goods trade,development level of service industry, foreign direct investment, urbanization leveland GDP as the explanatory variables which affect the competitiveness of Chineseservice trade. The analysis results show that foreign direct investment, thedevelopment level of goods trade and the development level of domestic economy(GDP) will have a positive influence on the competitiveness of Chinese service trade,while the development of service industry will have a negative influence on thecompetitiveness of service trade; the influences of urbanization level and humancapital are not obvious.According to the results of the empirical analysis and fact, this paper proposessome suggestions about improving the competitiveness of Chinese service trade inrespect of attracting foreign capital, service industry, related industries, governmentas well as human capital.