A Comparative Study Between The China’s And India’s Competitiveness In Service Trade

In the past ten years, the average annual growth rate of world trade in services remained synchronized with trade in goods, service trade is increasing becoming an important part of world trade. Development of trade in services plays an active role in improving the level of employment, promoting industrial upgrading, promoting economic growth. Today, the international competitiveness of the service industry and service trade has become an important factor to measure a country’s international competitiveness. China and India belong to a big developing country, there are some similarities in natural resources, labor resources and the level of economic development. In recent years, service trade of the two countries developed rapidly, has made remarkable achievements. In 2010, China’s service trade exports $162.2 billion, accounting for 4.6% of the world trade in services exports, ranking fourth in the world, India’s service trade exports $117 billion, accounting for 3.0% of the world trade in services exports, ranking tenth in the world. By 2014, China’s service trade exports reached 233.5 billion US dollars, ranking fifth in the world, India’s service trade exports 156.2 billion US dollars, ranking eighth in the world. Under this background, China and India are compared on competitiveness of service trade has important practical significance.This article makes a comparison of China’s and India’s service trade in international competitiveness including:first, simply elaborated the background and significance on comparative study of international competitiveness of China’s and India’s service trade, introduced domestic and foreign research status of service trade competitiveness; second, introduced the theoretical basis and metrics of international competitiveness of trade in services; third, comparison between China’s and India’s situation on the total amount and structure of trade in services, it is found that China total trade in service larger than India, but India’s service trade in trade surplus, and export structure is better than China; fourth, adopt the international market share, Michaely index, trade competitive advantage index; revealed comparative advantage index to compare the amount and industry competitiveness of service trade in China and India, it is found that in addition to international market share, the other three indictors China are lower than India, concluded that the service trade of India is more competitive; fifth, based on Porter’s competitive advantage of national’s, select the level of urbanization, per capita GDP, exports of trade in goods, market openness of service trade four indictors as explanatory variables,select the service trade exports on behalf of service trade international competitiveness as the dependent variable. Through multiple linear regression model, analyzed the main factors affecting the international competitiveness of China’s service trade, it is found that in addition to the level of urbanization, the other three factors showed negative correlation with service trade competitiveness; finally, to enhance the international competitiveness of China’s service trade, put forward five recommendation, including, to accelerate the pace of urbanization, improve the quality of service employees, tap the domestic demand for services, synergy trade in goods and services and further deepen the opening up of trade in services.