Research On The Impact Of The Liberalization Of Financial Service Trade With Economic Growth In China

Signing the General Agreement on Trade in Service has greatly promoted opening up the financial services market.No matter willingly or unwillingly,China`s financial service industry has taken part in the multilateral trading system of the world and is moving towards liberalization.With the development of liberalization in financial trade and service,China has gradually leveled up its service and the domestic investment market is more connected with other countries.Liberalization is injecting new vitality into domestic market.However,China`s financial service remains undeveloped and is facing enormous pressure with a long-term deficit.Guided by the theory of international trade,the article will analyze the effect of financial services trade liberalization on economic growth from two aspects,static state and dynamic state,and explore the transmission mechanism between liberalization and economic growth.The article will also collect relevant data released by official institutions to analyze the current situation of China`s financial services trade and summarize its scale and structure in international trade.The article will also sort out the historical process and characteristics of the China`s financial services liberalization.After theoretical and current analysis,the article will set up VAR and OLS model to quantify the impact of the China`s financial services market openness degree on economic growth based on data from 1990 to 2016.With the combination of theoretical research and current analysis,the paper will analyze the reasons for the fluctuation of economic growth and put forward that the liberalization will have a strong impact on the domestic market in short term.Finally,the article will suggest to focus on financial innovation in order to resist the impact and enhance domestic financial institutions` competitiveness.In the long run,China needs to be more open and gradually relax the approval standards.