A Study On The Employment Effect From FDI In Service Sector In China

The development level of service industry is an important indicator to measure a country's overall economic development.The development of China's service industry is relatively late,and there is still a big gap with the developed countries.At present,China is in a critical period of economic restructuring.In this change pattern,the development of service industry is faster than the manufacturing industry.With the continuous development of China's economy and the upgrading of the industrial structure,the proportion of the service industry in the national economy is growing,the focus of foreign direct investment has gradually shifted from manufacturing to service industry.At the same time,the employment of the service industry is also increasing,which has made a great contribution to solve the employment problem of our country.In this background,this paper attempts to study whether the FDI in the service sectors.has a significant impact on China's employment capacity,and further explore its impact on China's employment structure.In this paper,we elect the data of foreign direct investment and employment in various industries from 2006 to 2015,and analyze the relationship between foreign direct investment in services sector and employment by theory and practice.In the theory aspect,this paper focus on four ways of service foreign direct investment influencing employment:technology transfer,domestic investment,upgrading of industrial structure and international trade.In the empirical aspect,the provincial panel model is build to analyze the influence of service foreign direct investment.When analyze the impact of service foreign direct investment on employment,we analyze the impact of foreign direct investment in services sector on not only service industry employment but also the total employment.When analyze the impact of foreign direct investment in services sector on employment structure,we analyze the impact of service foreign direct investment on not only employment structure in the service industry but also employment structure of agriculture,industry and construction.The empirical results of this paper shows that once the short-time Fin services sector DI increase by 1%,the service employment increase by 0.067%;once the long-time FDI in services sector increase by 1%,the service employment increase by 0.032%;within the service industry,besides the financial sector,residential services and other services as well as cultural,sports and entertainment industries,the FDI in other industries of services sector promotes the employment of the industry.In the aspect of employment structure,service FDI make the employment of our country transfer to industry and construction and service;what's more,the proportion of employment in the service sector rises more significantly;within the services sector,service FDI will rise the employment proportion of real estate industry and information transmission,computer services and software industry and other three industries.And employment proportion of producer services will rise as well.According to the research results,three suggestions are given.Firstly,increase the openness of service industry and speed up the cultivation of high-end talent in service industry to improve the amount of service FDI.Secondly,guide the foreign direct investment into knowledge intensive service industry through tax intensive and preferential polices to optimize the employment structure of the service industry.Thirdly,government and enterprises work together to strengthen industry regulation and self-regulation,creating a healthy environment for the development of service industry,expanding the positive impact of service FDI on the capacity and structure of employment.