Research On The Location Of The International Division Of China’s Modern Service Industry

Since1990s, with the increasing trend of servitization in global economy, modernservice industry has been isolated from traditional service industry, developed fast andreplaced the leading role of manufacture. The rapid development which has replaced thedominant position of manufacturing industry forms the development orientation of industryin developed countries and many developing countries. Nowadays, modern service industryhas achieved international division and formed the international chain of modern serviceindustry with the core of knowledge and featured by high technology, high qualityemployers, highly industrial added value. Therefore, it has theoretical and practicalsignificance to study the trend of international industry chain in modern industry; weigh thegains and losses of Chinese modern service industry development; learn correspondingexperience of foreign companies; try to go through difficulties; fix the position of companycorrectly and implement relevant strategic measures.The article is theoretically based on the Smith Theorem under economy globalization.It analyses current development of Chinese modern service industry in the perspective ofinternational industry chain and points out that the industry is facing pressures such as“manufacture” in low end of international industry chain; high cost and output in low profitratio; similarity of technology and fierce market competition. The root of all these problemslies in the deviation of the position of international division in modern service industry.Subsequently, referring to the development experience of modern service industry in theU.S. and Japan, the article raises three strategic measures of the position of internationaldivision in China’s modern service industry, namely refocusing strategy,cooperation-competition strategy and outsourcing strategy.Sohu Co. is a service enterprise with high degree of internalization. Combined with theworking experience of the author as a intern for three months, this article adds the lastchapter “An Empirical Analysis of the division and position in China ’s modern service industry”. This chapter analyzes the positioning of the Sohu Company’s informationservices, media industry, entertainment industry in the international industrial chain andpoints out the problem of failing to extend to both ends of industry chain which is prevailingin Chinese companies and proves the effect of three strategic solutions. It finally respondsand verifies realistic effects of three strategic countermeasures previously proposed, whichis an obvious innovations of this paper.