Research on Effect of Chinese Service Industry's Foreign Direct Investment

Since the new century, China's foreign investment in services has been developing rapidly, and the growth of total investment has been increasing fast. Service industry's share in China's foreign direct investment has been increasing as well, and it becomes the main direction of foreign direct investment instead of manufacturing. Firstly, this paper describes the present situation of China's service industry in foreign direct investment. Secondly, it qualitatively analyzes the effect caused by the foreign direct investment of service in China, among which the main analysis object is the transmission mechanism from the foreign direct investment of service industry in China to optimization of the level of service industries' development. Finally, the thesis gives some suggestions based on the former two parts. This study shows that foreign direct investment in service can bring positive effecta, and it can improve the level of China's service industry through the structure optimization effect, competition effect, industry demonstration effect, human capital effect and upgrade technology effect.