FDI Of Producer Service And The Manufacturing Competitiveness Of Host Country

Since the60s and70s of the20th century, with the developing of science and information technology, services, especially producer services industry was the first to blossom in developed countries, and gradually become the leading industry of the national economy. Producer service industry in China started relatively late. Before reform and opening up, the service industry in our country was treated as non-material production department which does not create value, its development was seriously restricted. Following development of innovation, especially after jointing WTO, China’s service industry began to develop rapidly, and became more and more important in the national economy. However, in contrast with developed countries, the development of producer services in our country still lags behind. There is a long way to satisfy the requirement of the new industrialization and sustainable development of our country.At the same time, some new changes have taken place in the area of producer services because of the liberalization of world services industry. Among all those changes, one of the most notable thing is that the foreign direct investment in the field of producer services industry is growing rapidly, which is gradually becoming the mainstream of the international direct investment. As the world’s largest developing country, China has a huge market potential. Producer services FDI pours into mainland market as our government is gradually loosening the regulation of foreign capital.That’s why producer services FDI in China grows rapidly recent years. On the other hand, the growth pattern of China’s traditional manufacturing industry which can be described as "high consumption, low output; high investment, low returns"has not been changed in the last thirty years, which leads profitless and uncompetitive of China’s manufacturing industry. What mentioned above gives rise to the research topic of this paper:In the transformation period of our economy, whether the FDI of producer services can give full support to the manufacturing industry of the host country, which can also have a great influence on the competitive advantage of manufacture of the host country.This paper includes six chapters, the main content can be summarized as follows:the first chapter introduces the background, significance and framework of this research; The second and third chapter is the theory analysis part. In the second chapter..related research status at home and abroad were summarized. And in the third chapter, we mainly analysis how the FDI of producer services to produce an effect on the competitiveness of the host country’s manufacturing industry; In chapter four and five, with the date of twenty-two provinces of China from2002to2011, static panel model and dynamic panel model are used to empirically prove that there exists positive correlation relationship between the FDI of producer services and China’s manufacturing competitiveness; The sixth chapter is the main conclusions and policy implications of this paper.