Analysis On The Impact Of Foreign Direct Investment On The Competitiveness Of Service Trade In Shanghai

With the global industrial upgrading and the development of information technology,trade in services has achieved relatively rapid development,becoming the main industry of international trade and the first driving force of nationalization of production.China,the world’s largest economy,is also accelerating its economic transformation and promoting trade in services as a new driving force for China’s opening up to the outside world.Shanghai,as a province and city at the forefront of China’s economic development,has maintained its position as one of the top three in China’s service trade all year round,with a high degree of openness to the outside world and a strong attraction to foreign investment.From the actual situation,foreign direct investment and service trade have a tendency to develop simultaneously.The focus of this paper is on whether FDI in Shanghai can contribute to the competitiveness of Shanghai’s service trade.Firstly,through the literature and a lot of theoretical research,we analyze the relationship between FDI and service trade.From the literature,we can see that FDI has an impact on the competitiveness of service trade and the use of FDI can promote the competitiveness of service trade.Then,this paper mainly introduces the current situation of FDI and service trade in Shanghai.Shanghai’s foreign direct investment is still mainly concentrated in the tertiary service industry,and the actual amount of foreign investment utilized in the service industry is also in a stable state;the competitiveness of Shanghai’s service trade is still relatively low in general compared with the international one,but from the trend of each industry,the competitiveness of the traditional service industry can remain stable,and the modern service industry,mainly computer,finance,insurance,etc.,although still does not have international competitiveness However,they have been steadily improving.Secondly,through regression analysis,with TC index as the explanatory variable and FDI as the explanatory variable,the relationship between service trade competitiveness and foreign direct investment in Shanghai is verified,and it is concluded that FDI has a positive influence on service trade competitiveness and promotes the improvement of competitiveness,and the degree of openness and disposable income of residents have a positive influence on service trade competitiveness,on the contrary,with the increase of R&D investment,service trade competitiveness FDI,degree of openness and R&D have a more obvious role in promoting emerging technology industries,while there is no significant relationship between FDI and traditional service industries.There is also no significant mutual promotion relationship between secondary and tertiary industries.Finally,the following suggestions are made:first,the government needs to establish a perfect system to create a good environment to improve laws and regulations and further promote openness;second,use foreign capital to attract high-level talents while strengthening the cultivation of local talents;third,pay attention to consumer demand and grasp the future development direction more precisely;fourth,use foreign capital to support emerging industries,stabilize traditional industries,and strengthen the connection between industries.