The Study On Chinese Service Internal Structural Optimization Through Foreign Direct Investment

Since the reform and opening up the outside especially since the accession to the World Trade Organization, China’s strategy of economic development has changed and the service industry has attached more importance which results in its rapid development. The share of the service industry in GDP has continuously increased and the value was41.3%in2012. Although the service industry has developed rapidly, its internal structure is not very reasonable. For example, the traditional service industry’s share in employment and added value is relatively high. The entrance of FDI can not only drive the development of the service industry, but also can optimize the internal structure by technology spillover effects or other effects. So, China and different regions can optimize the internal structure of the service industry.First, the introduction analyzed the reason that why the FDI was used to opti mize the internal structure of the service industry. On that basis, the purpose and m eaning of the study was introduced. Then, the main contents of the study and the u sage method were elaborated. At last, the innovation and the shortcomings were st ated. The correlation theory and literature review part introduced the connotation o f the service industry, the classifications of the internal structure and the theoretical basis of the change of the internal structure. At last, the part summarized the previ ous study systemically and the research direction was set forth on that basis. In the next part, first the present situation of internal structure in China and different regi ons was introduced. Then the FDI investment structure of the service industry in C hina and different regions was analyzed. The analysis showed that the change of e mployment and the added value in service industries corresponded to the project n umber of FDI in service industries and actual inflow of foreign investment. Next p art is the analysis of the effects and influencing factors of FDI to the internal struct ure of the service industry. This part first introduced the connotation and importanc e of the optimization to the internal structure. Then the capital vacancy, technology spillover, competition, demonstration and industrial relevant effect were analyzed. At last, the effecting factors of FDI to the internal structure of the service industry were expounded.At last, the thesis did the empirical analysis about the FDI optimization effect to the internal structure of Chinese service industry. First the thesis introduced the settings of the empirical model and the selection of the variables and the datum. Then the regression results were analyzed and the analysis showed that the entrance of FDI to the service industry will reduce the share of the traditional service industry in employment and added value, increase the share of the modern service industry. Thus, the internal structure will be optimized. Among the eastern, central, western regions, the affection in central region is the most obvious, and next is the eastern region. According to the analysis, relevant suggestions were proposed.In recent years, international and domestic scholars have analyzed the FDI effects to the service industry’s internal structure of some specific provinces, the industrial structure, the growth of the service industry, etc. However, the research about the FDI effects to China is relatively less. Thus, the thesis has studied the FDI optimization effect to China and eastern, central, as well as the western region’s internal structure of the service industry. This is the innovation of the thesis. Due to the limitation of time, there are some shortcomings in the thesis. For example, there is no unitary definition in academia at present, so the thesis adopted the conventional classification in China. In the aspect of data processing, some data can’t be accessed directly.