Research On Impacts Of China's Service Trade On The Service Labor Wages

With the Service gradually becoming the signaficant part of international trade, the trade in services of China has boomed and reached an remarkable level. In 2015, Total import and export of services of China was 7130 billion dollars, accounting for 7.7% of global service trade in services,which made China the third major service trading country all over the world. However, the openness of service trade can affect domestic service industry as well.The development of foreign trade is closely related to the fluctuation of wage level during the same period. Under the industrial restructuring, service industry plays an increasingly important role in economy developing. In 2013, the proportion of tertiary industry in China was 46.1%, bigger than that of secondary industry(43.9%). And in 2014, it increased to 48.2%.As the main strengh to improve economy, domestic service industry is closely related to foreign service trade. There are more influence of service trade on wages in trading industries.Therefore, this paper focuses on the industry and trade in service. In the first place, we discuss the theoretical influence mechanism of the service trade on wages through models from E-K (2002) and Grossman&Hansberg (2006) based on traditional trading models. In the second place, we test the influence of import, export and deficit of service trade on wages of whole industry, traditional service sector and modern service sector respectively, by the panel data of Chinese service industries from 1997-2013.Empirical results show that service export has positive effects on the wages of all sectors', and service import is negtive to the wage of traditional service labor and positive to modern's. What's more, wages of whole service industry can be reduced due to trade deficit increasing. The improving labor productivity, employment (labor demand) and the the scale of the enterprises are benefitial to remuneration for workers.Finally, this paper, according to the results, proposes valid suggestions in order to improve the income of the employed and narrow the wage gap.