A Study On The Chinese Service Trade's Influence On Economic Growth

As the economic globalization grows progressively,the trade links among countries are tightened and the development of service trade is also accelerated.Not only does service trade play an increasingly prominent role in the development of a country's economy,but also plays a decisive role in the competitiveness of its trade in the international market.With economic integration making the competition for foreign markets increasingly fierce,service trade is moving forward to replace commodity trade and becoming the center of world trade.Therefore,a superior stand in service trade could be considered as a rather important indicator for the strength of a country.But some defects resulting from service trade start to reveal during the development acceleration such as depending on labor-intensive industries and slow development in high added value industries.In addition,the lack of competitiveness in service trade is restricting China's development due to the late start of service industry and the problem of economic structuring.First,this paper provides a brief overview of the development of China's service trade,then analyzes the competitiveness in the international market by using the TC index and discusses the unique mode and characteristic of China's service trade;secondly,studies the impact of service trade on China's economic growth from both the perspective of import/export volume in service trade and the perspective of how service trade affects economic growth,which is first using Granger Test and OLS Regression to analyze the connection between economic growth and imports,exports,foreign investment in services industry and the income in service industry then analyzing how service trade affects economic growth through employment,technology and investment.At last,some policy recommendations are given based on the existing problems of China's service trade.This paper is divided into six chapters,the contents are as follows:The first part is the introduction.First,sets forth the background and significance of this research;secondly,reviews and summarizes related literature from different scholars;thirdly,states the research methods and contents;lastly,analyzes the innovations and shortages of this paper.The second part is the introduction of theories of service trade.First,the concept of service trade and economic growth are given,then follows the elaboration on compared advantage theory,diamond model,technology gap theory,economic growth theory,new economic growth theory and the analysis of the characteristics of China's service trade based on said theories.The third part is the analysis of the current status of service trade in China.First,a brief overview of China's service trade is provided;secondly,analyzes the competitiveness of China's service trade by using the TC index;thirdly,elaborates on the characteristic and mode of China's service trade development.At last,summarize the problems that exist in the development of China's service trade.The fourth part analyzes the connection between service trade and economic development in China.First,analyzes the connection between service trade and economic growth,and discusses the ways through which service trade would affect economic growth.Then conduct empirical analysis on the link between import/export volume of service trade and economic growth with Granger Test and OLS Regression.The fifth part is the conclusion and policy recommendations.First,summarizes the problems in China's service industry that impact its economic development based on empirical results and analyses the reasons;secondly,offer a few proposals on how to develop China's service trade according to the existing problems and the results of empirical analysis.In conclusion,although the overall competitiveness of China's service trade is at a comparative disadvantage,the advantages of traditional industries is gradually fading whereas the high added value industry is booming and the competitiveness of related industries is increasing;the level of China's service industry development is comparatively low but the speed is very fast.Import in service trade,export in service trade and the investment in service industry have positive effects on economic growth while the effect of income in service industry is undecided.Service trade is the Granger reason of economic growth but conversely not.