Research On China’s Financial Service Trade Flow Based On Gravity Model

Since the1990s, the global economic integration developed faster and faster, china’s reform and opening up process was pushed forward, China’s economic internationalization degree enhanced unceasingly. At the same time, service trade has made rapid development. It becomes the dominant force in promoting economic growth gradually. Service trade becomes the core of the national economic competition strength gradually, replacing goods trade. Development of service trade is one of the important indicators of a country’s international competitiveness. Financial service trade plays an increasingly important role in economic growth as an important part of service trade. Even though china’s financial service trade is growing year by year, there is a trade deficit phenomenon for a long time. It is necessary to study on factors which affect China’s financial service trade flows.After deliberating on literature on financial service trade at home and abroad, making use of the experience of predecessors, this article analyzes factors which influence the financial service trade flow based on gravity model. Due to the variable distance of the basic gravity model, whether gravity model is applicable to financial service trade flow research or not is questioned. The second part of this outlines the development situation of China’s financial service trade, Pointed out problems existing in China’s financial service trade as below: imbalance of china’s financial service trade structure, late starting of china’s financial service trade, lack of innovation ability and professional talents on china’s financial service trade. The third part of this article qualitatively analyzes factors influencing china’s financial service trade. The fourth part is empirical analysis on factors influencing china’s financial service trade flow.According to the results of gravity model regression, the financial crisis and the distance impede the development of China’s financial service trade. China’s export trade of goods, trade partner’s GDP, and trade partners of economic freedom play an important role in promoting China’s financial service trade export flow. Combined with t obstacles such as financial crisis, perfecting the financial regulatory system is put forward. Controlling the financial risk to minimize the impact of the financial crisis on China’s financial service trade is quite important. Based on the catalyst of the gravity model, policy suggestions such as strategy of "going out", improving the financial service trade environment and strengthening the government support are put forward. Finally, combining the problems existing in the Chinese financial service trade, policy suggestions such as raising the attention of the financial trade in services, strengthening the propaganda related to financial services, perfecting the financial service statistics system and paying attention to the professional talent training in the financial services industry are put forward.