A study on the influence of the opening up of China’s service sectors on service employment

LI Yang1 ZHANG Pengju1 HUANG Ning2

(1.China Institute for WTO Studies, University of International Business and Economics)
(2.Chinese Academy of Science and Technology for Development)

【Abstract】This paper analyses the development and status of the opening up of China’s service industry and its employment on a sub-sector basis, and examines the employment effects of trade and FDI from 2004 to 2012. After classifying service sectors by tradability and factor intensity, this study also examines the impacts of different types of service sectors on employment. The results show that, in general, the service exports have no significant impacts on the employment, but the service imports have a strong substitution impact on the employment. For service import, the impacts of higher-tradable service imports and capital-intensive and knowledge-intensive service imports are significantly positive, and the impacts of lower-tradable service imports and labor-intensive service imports are significantly negative. FDI in services has not brought about significant job growth but reduction in employment instead. The negative effect is generated mainly by capital-intensive and labor-intensive FDI in services. Finally, this paper suggests that China should gradually expand the opening up of service by sub-sector and sub-area, while developing supporting policies to ensure the stability and growth of employment.

【Keywords】 opening up of service industry; employment; tradability; factor intensity;

【DOI】

【Funds】 Project of Humanities and Social Sciences of the Ministry of Education of China (15YJA790035).

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(Translated by TANG Weiqing)

    Footnote

    [1]. ① According to stipulations of General Agreement on Trade in Services (GATS), service trade supply modes include four types: Mode 1 is cross-border supply, meaning the supply of services within the border of one member to another; Mode 2 is consumption abroad, meaning the consumers of one member consuming services within the border of another member; Mode 3 is commercial presence, meaning the service suppliers of one member provide services to consumers within the border of another member through commercial presence; and Mode 4 is movement of natural persons, meaning service suppliers of one member provide services within the borders of any other members through the presence of natural persons. [^Back]

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This Article

ISSN:1000-7881

CN: 11-1043/C

Vol , No. 06, Pages 80-90+128

December 2015

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Article Outline

Abstract

  • 1 Research background
  • 2 Opening up and employment of China’s service industry
  • 3 Empirical analysis of the impact of the opening up on the employment in China’s service industry
  • 4 Conclusion and policy implications
  • Footnote

    References