The impact of the development of service trade on China

1. The possible impact of liberalization of international trade in services on developing countries

The signing of the General Agreement on Trade in Services and the impact of liberalization of international trade in services on developing countries There are economic aspects and non-economic aspects. Its economic impact is mainly reflected in the following aspects:

1. Impact on economic efficiency. In general, liberalization of services trade is conducive to improving the economic efficiency of developing countries, which is mainly reflected in the following aspects: (1) As foreign service providers enter the market, enterprises in developing countries can have more opportunities to choose. High-quality and low-cost services improve the economic benefits of enterprises. (2) Developing countries can import producer services that are urgently needed for economic development but cannot meet the demand in their own countries, thus helping to solve the contradiction between production development and backward service industries. (3) Competition from foreign enterprises will force service enterprises in developing countries to align with the international advanced level, absorb foreign advanced service technology and experience, strive to reduce costs, improve quality and competitiveness, and enter the world market. (4) It is conducive to developing countries to develop their own service industries with advantages and import services that do not have comparative advantages, thus promoting the effective allocation of economic resources and creating more opportunities for the export of service industries in which developing countries have advantages.

2. Impact on the balance of payments. The impact of liberalization of trade in services on the balance of payments is twofold. On the one hand, as developing countries reduce restrictions on service imports, it may lead to a large increase in imports in the short term and worsen the balance of payments; on the other hand, developing countries can Take advantage of the liberalized international environment to expand its service exports. With access to high-quality and low-cost import services, developing countries have the potential to reduce the cost of their material products, improve their quality, and enhance the international competitiveness of their exports of goods, thereby increasing their incomes. At the same time, moderate opening of the financial services market will also facilitate the inflow of foreign capital and improve the international balance of payments.

3. Impact on technological progress. The liberalization of services trade can promote technological progress in two main ways: (1) Services trade itself can become a channel for technology transfer. Since technological progress often occurs first in the service field, developing countries can obtain advanced technology and other information through technology introduction, consulting, training and other technical services. At the same time, foreign direct technology investment in the service industry is often accompanied by certain technology transfers. (2) The pressure of international competition will force the service industries of developing countries to accelerate technological progress to improve their competitiveness, and thereby drive technological progress in other sectors. Of course, liberalization of services trade may also have a negative impact on technological progress. For example, if a country is overly dependent on foreign high-tech services, it may inhibit its own research and development in this area. But generally speaking, the liberalization of services trade has a positive impact on technological progress.

4. Impact on labor and employment. The service industry in developing countries has low labor productivity, high labor intensity, poor labor quality, and difficulty in transferring to other sectors. Therefore, the liberalization of trade in services may worsen the employment situation in the domestic service industry and related material production sectors, and also affect the high-tech service sectors that have not yet grown in developing countries, such as telecommunications services, legal professional services, and financial and insurance services. , information consulting services, etc. may cause damage, thus affecting the development of these service industries and domestic employment. However, the expansion of service imports and exports may also increase some employment, especially through the expansion of labor exports, which can alleviate some pressure on domestic employment.

5. Impact on economic security. The impact of liberalization of services trade on the economic security of developing countries is mainly reflected in two aspects: (1) The impact on the country's economic independence and economic sovereignty. Liberalization of services trade may weaken the economic independence of developing countries. The reason is that first of all, the commitment to liberalization of services trade will cause developing countries to lose some of their economic decision-making autonomy to a certain extent, especially those of developing countries. Certain vital service industries, such as communications, finance, and transportation, may be controlled and dominated by multinational corporations from developed countries, thereby compromising the sovereignty of the host country. Secondly, competition from foreign services may inhibit the development of weak emerging service industries in developing countries, especially high-tech producer services and related high-tech industries, making it difficult for them to improve their industrial structures and thus compete in high-tech services. depend on developed countries. (2) Impact on the stability of economic development. The stability of economic development is linked to independence. Unreasonable industrial structure and high dependence on foreign countries will affect the long-term stable development of the economy. In addition, liberalization of trade in services also increases economic instability in the following two ways: On the one hand, liberalization of trade in services encourages a country to develop its own service industry with comparative advantages based on the principle of comparative advantage, which may enhance certain developments. China's dependence on a single service sector is not conducive to the development of these countries' adaptability to the international market; on the other hand, the opening up of financial services markets such as the banking industry will connect the domestic financial systems of developing countries with the world financial market. together. Once there is strong turmoil in the international financial market, it will inevitably have an impact on the economies of developing countries. For example, the Southeast Asian financial crisis that began in Thailand in July 1997 soon caused turmoil in the entire Asian and even global financial markets.

6. The influence of restrictive factors.

Through the above analysis, it is not difficult to see that the impact of liberalization of services trade on the economic benefits of developing countries is more good than harm, but the impact on economic security is more harm than good. It should be pointed out that when making trade-offs, developing countries must not only make theoretical reasoning and analysis, but also take into account practical constraints, because these factors have a substantial impact on the fate of developing countries in the liberalization process. .

(1) Constraints of the international economic environment. Liberalization of trade in services can provide developing countries with more and better services and improve the competitiveness of developing countries' export commodities. However, in actual economic life, the areas where developing countries have the strongest export competitiveness are often the areas where developed countries have the strongest trade protectionism. Therefore, the benefits that developing countries should receive due to improved export competitiveness may be largely offset by the trade protectionism of developed countries. Technology protection in developed countries also limits to a certain extent the benefits of technology transfer that developing countries may obtain from the liberalization of trade in services.

(2) Constraints of developing countries’ own technological levels and capabilities. Liberalization of services trade can stimulate the service industries of developing countries to improve their competitiveness, reduce trade barriers, and help developing countries' services with their own comparative advantages enter the international market. However, international competition in the modern service industry is increasingly shifting from competition on labor costs and geographical environment advantages to competition on technology. The relative backwardness of science and technology is precisely the biggest obstacle in the real economy of developing countries, which is manifested in low technical level and management level, lack of necessary material production foundation, etc. Information technology services have benefited the most from liberalization. Due to the constraints of technological capabilities in developing countries, without effective measures, in a free trade environment, the competitiveness of developed countries may have an inhibitory effect on the development of service industries in developing countries. greater than the promotion effect.

(3) The constraints of the internal industrial structure of the service industry in developing countries. The biggest weakness of the service industry structure in developing countries is the underdevelopment of producer services. Therefore, it is most necessary to introduce producer services from the international market, and information technology producer services are precisely the areas that have the greatest impact on national economic security. If developing countries are completely left to their own devices, they will inevitably become dependent on developed countries in this regard. The danger of relying on developed countries for information technology producer services is not only that it suppresses the development of high-tech services in their own countries and makes it difficult for developing countries to reform their backward service industry structures, but also that it may make developing countries lose the upper hand in the world's information resources. disadvantaged position in the redistribution system. When developing countries rely on imports for data processing, a pattern may arise in which developing countries provide raw, unprocessed data and developed countries process it. In this exchange, on the one hand, developing countries have to pay for data processing, and on the other hand, they export original information for free, while developed countries earn free information while earning the added value of information processing. The free outflow of information not only causes developing countries to lose valuable economic resources, but also poses a potential threat to national security.

Judging from the development trend of international trade in services, external competition caused by liberalization will force developing countries to develop only traditional services such as tourism, engineering construction, and labor exports with comparative advantages. The service industry of developing countries Structural limitations have led to its dependence on imports of producer services. In this way, on the one hand, developing countries rely on the import of information technology producer services from developed countries, and on the other hand, they rely on the export of traditional service industries to exchange for foreign exchange and balance the international balance of payments. The liberalization of services trade is likely to solidify this pattern. The essence of this service trade pattern is that developing countries exchange services with low added value for services with higher added value in developed countries, and exchange simple labor with complex labor. This means that the rich labor resources of developing countries can no longer be converted into higher value in the international market, and the service trade pattern of developing countries is limited to a low value-added level. Once this service trade pattern based on comparative advantages continues for a long time, developing countries will never be able to change their backward status. This is the most serious practical problem faced by developing countries in the process of liberalization of trade in services

2. Developing countries formulate countermeasures and principles for the liberalization of international trade in services

The role of the service industry in It plays an important role in the economic development of developed countries, and the service industry is also of great significance to the economic development of developing countries. Therefore, regardless of the impact of liberalization of international services trade, developing countries must face the reality of liberalized development. Because liberalization is an objective requirement for the further development of international trade in services. Under such circumstances, the basic guiding ideology for developing countries to formulate services trade liberalization countermeasures is to break the limitations of their original comparative advantages, shorten the technological gap, improve their own service trade structure, and thus use services trade liberalization as much as possible to promote their own service industries. development while minimizing the negative impact of liberalization. From the perspective of international competition, the following points deserve the general attention of developing countries.

1. The service industry of developing countries should be based on promoting the development of the entire economy, not just for exporting to earn foreign exchange and increase income. In accordance with the principle of comparative advantage, utilizing natural conditions and cheap labor advantages to develop a few traditional services such as tourism, engineering construction, and labor export can quickly obtain economic benefits as a source of international balance of payments. However, in the long run, this export strategy is difficult to maintain a long-term foothold in the international market.

As we all know, the international competition in the contemporary service industry is linked to the international competition in the material production sector. Powerful countries in international service trade are also powerful countries in material production. The core of modern service trade is productive services with information technology services as the main body. If traditional non-information services can rely more on factors such as labor force or geographical environment to gain relative advantages, then the improvement of the international competitiveness of information services is linked to the development level of the entire social productivity. Even in developing countries and regions, Singapore and Hong Kong, which have strong service trade, are also countries and regions with a strong position in tangible trade. Therefore, developing countries cannot separate the service industry from material production. Special attention should be paid to the development of producer services, and the development of the service industry and the development of material production should be organically combined to promote and support each other, so that the service industry can play a positive role in economic development. In this way, on the one hand, the development of producer services can help improve the competitiveness of commodity exports. On the other hand, the improvement of the competitiveness of producer services can improve the structure of service exports and reduce dependence on foreign services. When implementing this strategy, we must not be eager for quick success. For certain knowledge- and technology-intensive services that play an important role in promoting production development, even if they do not comply with the principle of comparative advantage and are temporarily difficult to enter the international market, they should be supported, because only in this way can we ensure The staying power of service industries in international competition.

2. Developing countries should have a clear understanding of their advantages in cheap labor. With the development of social productivity and science and technology, mankind has entered an era in which information, culture and knowledge are the main means of production - the era of knowledge economy. In such an era, comparing the advantages of labor depends not only on its price, but also on its quality. Although labor costs in developing countries are low, their cultural and technical qualities are low and they can only engage in labor-intensive or low value-added services. Although labor costs in developed countries are higher, they are engaged in high value-added knowledge and technology-intensive services, creating of high value. Therefore, developing countries must make great efforts to improve the quality of their labor force, otherwise they will only be able to engage in labor-intensive services in the competition of liberalized services trade. Of course, this does not mean that developing countries cannot develop labor-intensive services. In fact, developing labor-intensive services first is the only way for developing countries to enter the international service market. However, it must be clear that the development of labor-intensive services is not an end in itself but a means. It is to create conditions for accumulating funds to improve the technical level of services in the future.

3. Developing countries should improve the technical level of services on the basis of openness and give full play to the role of service trade as a technology transfer channel. In the process of liberalization of service competition, the greatest impact on the economic security and national sovereignty of developing countries is in the high-tech information fields such as communications, finance, and computer services. Developing countries are most in need of introducing such services and are most likely to benefit from technology transfer from such services. If we close ourselves off due to impact, we will only fall behind forever. The only option is to introduce technology under open conditions and cultivate its own high-tech service industry. In the early stages of establishing high-tech service industries in developing countries, it is more advantageous for developing countries to introduce high-tech services by absorbing foreign direct investment. Because direct investment is more conducive to technology transfer. 80% of U.S. technology transfer to developing countries is through direct investment by multinational corporations. However, the introduction of high-tech services through trade can only produce results but cannot introduce production processes. On the contrary, it will easily lead to dependence on imports and is not conducive to the development of high-tech service industries in developing countries from scratch. Of course, the introduction of direct investment in high-tech service industries will involve a series of issues related to national sovereignty and security, which requires developing countries to adopt appropriate policy measures to seek advantages and avoid disadvantages.

4. Strive for the initiative in international negotiations. In international negotiations on liberalization of trade in services, developing countries are currently in a passive position. There are many suggestions that deny developed countries, but few concrete measures of our own. Developing countries should make their own analysis of existing service trade barriers and put forward positive suggestions on the basis of adhering to the principle of differential treatment. Developing countries should have two main goals in international negotiations on liberalization of trade in services: one is to maintain the right to moderate protection of their own service industries, and the other is to strive for favorable conditions for improving their service industries to the world.

The starting point of protection should be to improve the technical level of the country's service industry and cultivate its own high-tech service industry; the starting point of opening up should be the introduction of technology. It must be noted that technology transfer is an opportunity that developing countries may benefit from. The greatest benefits obtained from the liberalization of trade in services.

References

[1] Paul Samuelson, William Nordhaus: "Economics", China Development Press, 1992 edition.

[2] Peter Lindt: "International Economics", Economic Science Press, 1994 edition.

[3] Tian Wenjun: "International Trade in Services", Peking University Press, 1999 edition.

[4] Huang Weiping and Cheng Dawei: "Analysis of Trade Barriers in Developed Countries: Thoughts of Developing Countries", "International Economic Issues", Issue 4, 2001.