Positive analysis on the impact of foreign direct investment in services in China

In recent years, foreign direct investment has become a global trend toward service industry. This paper demonstrates the impact of FDI in Chinese service sector. The results show that the amount of foreign direct investment in services is in the increasing volatile growth from 1998 to 2009. But there are a smaller contribution degree and contribution rate and a lower elasticity of FDI in service industry to the total FDI. Cointegration results show that there is a long-term stable equilibrium relationship between FDI in service industry and overall growth of services??and FDI can contribute to the overall growth of service industry in China. However ?? it is not significant correlation relationship between FDI level and service industry value added, which only show the added value of the service industry is the Granger cause of FDI in services, there is no Granger causality in the opposite direction.