An Empirical Study on the FDI in China´s Services Industry

The degree of openness of services industry has been greatly improved since China´s opening up to the outside world. As a result, FDI in services has grown substantially. It can be expected that China´s services industry will become the most attractive field to foreign capital after China´s entering into the WTO commitments on services. In this paper, the status, problems and determinants of FDI in China´s services industry are analyzed. The empirical results indicate that services FDI in China are positively influenced by the degree of openness and market scale, while high wage rate acts as deterrent to inward FDI stock.