国际服务贸易（双语）(International trade in services)

课 程 教 案2018 - 2019 学年第一学期

西安培华学院会计与金融学院

课程教案基本信息表课程编号 课程名称 国际服务贸易课程类型 公共必修课（ ） 专业必修课（ √ ） 专业限选课（ ） 专业选

修课（ ） 公共选修课（ ）总学时/学期学

时 32 总学分/学期学分 2

学时分配 课堂讲授学时：28 实验（实践）学时：4

授课学生系（部）别/专业

班级/人数

系（部）别 专业班级 人 数国贸专业 国际经济与贸易 1601 班 45

考核方式 考试（ ） 考查（ √ ）教学大纲制订 制订人：王西娅 制订时间：2012.9 修订时间：2017.9

教材名称 王西娅,杨立盟. 国际服务贸易（双语）.北京：科学出版社,2012.

教学参考书

[1] 国际服务贸易. 陈双喜. 大连：东北财经大学出版社，2008[2] 毛传新.国际服务贸易[M].南京：东南大学出版社，2009[3] 陈宪.国际服务贸易——原理·政策·产业.上海：立信会计出版社，2004[4] 刘东升. 国际服务贸易.北京：中国金融出版社，2005

授课教师姓名 刘心占 专业技术职务 讲师

从事专业 国际贸易 行政职务 教学干事

2018 - 2019 学年第一学期授课计划

课程名称 国际服务贸易 开课系（部） 经济系 任课教师 刘心占采用教材名称 国际服务贸易 编著者 王西娅 版本 2012

年 6 月辅助教材 （讲

义） 国际服务贸易 课程总学时（总学

分） 32 周学时 2

任课班级 （含人数）

本学期总学时

其 中讲课时数 实验时数 作业次数 测验时数

8B1611 班（45人） 32 28 2 5 2

备注教学大纲制订部门 经济系 制订日期 2012.9 修订日期 2017.9

教研室审核意见：负责人（签名）

年 月 日

系（部）审核意见：负责人（签名）

年 月 日教务处审核意见：

负责人（签名盖章） 年 月 日

2018- 2019 学年第一学期授课计划表Order Contents and Abstracts Hours Remarks

1 Chapter 1 Introduction to Service EconomyService; service industry; service trade

6 hrs.

2 Chapter 2 Basic Categories of International Trade in ServicesConcept and characteristics of international

trade in services; Classifications of International Trade in

Services; Statistics of International Trade in Services

8hrs. Including2hourspractices

3 Chapter 3 Theory of International Trade in Services

Relevant Theory on Services;Relevant Theory in Service Industry;Relevant Theory on Trade in Services

8 hrs. Including2hourspractices

4 Chapter 4 Policy of International Trade in ServicesEvolution of Trade Policy in Services; Policy of Trade Liberalization in Services; Policy of protectionism of trade in services

6 hrs.

5 Review 2 hrs.

6 Examination 2 hrs.Total 32hrs.

Chapter 1 Introduction to Service Economy （6hrs）

【Teaching Purposes and Requirements】● Grasp the basic concept，classification and features of service,

● Familiarize the relative theory of service industry

●Understand the basic concept of the trade in services

【Learning Objectives】This chapter mainly explains the basic concept of international service trade, including service, service industry and service trade.

【Key and difficult points】Grasp the basic concept，classification and features of service, service industry and

service trade

Understand the basic concept of the trade in services

【Teaching Contents】Step 1: Warm-up (case discussion)

1. What is service in your mind? Or give me some key words related to service.

Key: It’s quite different from goods, which is visible and tangible. It means you can see it, touch it and transfer it to others. While service is invisible and intangible, you can just feel it—it's a kind of mental satisfaction, to meet customers’ specific needs. Another feature is when you buying service it will be produced and consumed at the same time.

2. How about China’s service industry development in the past days?

Key: With the rapid development of the world service economy, the core of the international trade is turning from the traditional trade in goods into the one in services.

Generally speaking, though China trade in services started in the low point, it has improved rapidly with great potentiality.

In order to enlarge the trade scale, improve the trade structure in services and promote the world competitive power of trade in services, international trade in services will be a new increase in the will-be economy in our country.

Step 2:

Section 1 Understanding of service

In the economics, goods that can satisfy people’s needs can be divided into two kinds: ① free goods ② economic goods

• Free goods---you don’t need to try your effort to obtain; such as sun, air, sea, mountain.

• Economic goods– you have to show your effort to obtain them, which are so important and limited in this society. They can be divided into two: tangible goods and intangible services.

Firstly let’s go over the historical definition of service.

1.1 definition of service

1). Before the World War Ⅱ: Definition of services were not clear.

＊ French economist— Jean Baptiste Say (萨伊，1767-1832)

He proposed in the book Introduction to Political Economics that the invisible goods(service) are the fruit of human labor and the capital outcome as well.

＊ French economist— Claude Frederic Bastiat (巴斯夏,1801-1850)

Bastiat contributed a lot in the theory of service economics with his main idea to the service value called Transaction Theory. He proposed in the book Theory of Economic Harmony that this(labor service) is one effort.To A, service is the effort he provides and to B, service is the demand and contentment. Labor service must include the transaction of transfer because it cannot be supplied if it is not accepted by people.

＊ Karl Marx (卡尔·马克思，1818-1883)

He showed a penetrating definition of service: the word service normally refers to the special value-in-use made by this kind of labor just as other goods supplies its own special value-in-use. But this special use value of labor is called service because labor is not goods but the activity to supply service.

This definition first of all proves that service is value-in-use, is the labor production, and is the social wealth to make the transactions in the market. Then this definition

expresses that the difference between service and other goods is only the patterns, Goods get the visible pattern but service expresses the pattern of activities.

2).After the World War Ⅱ: Services have been defined as an activity to sell to be benefited and satisfied.

＊ Marketing expert—Philip Kotler (科勒特，1967)

＊ V.Fuchs (V.富克斯，1968)

＊ T.P.Hill (霍尔)

＊ Gronroos (格鲁诺斯)

Gronroos defined service on the basis of the previous research as ‘an action or a series of actions that solve customer’s problems and usually happen in an intangible form between customer and service clerk, among tangible resources and goods or service system.’

Up to now in the whole worldwide there is no unified and standardized definition of service. We just come to the conclusion that:

• Service is a job or a kind of economic activities done by the individuals or social organizations for the customers with the help of some tools, facilities, equipments and mediums;

• it is an activity and benefit provided for individual consumer or enterprise to meet their specific needs, whose production may or may not be related to material products;

• it is the added value for individuals, goods or service in other economic units, and has the value-in-use or utility represented in the form of activities.

[students’ reflection] After the explanation of service definition, can you summarize it in your words? Try it in pairs.

1.2 Characteristics of service

Before we discuss this topic the following questions are for you:

A. Do you have any experience being served in any occasion?

B. How do you evaluate that service?

C.Can you tell us some characteristics of service from your previous experience?

＊ Intangibility: The shape goods is visual, but the form of service is invisible. For

example:

When you are going to buy household appliances, you can choose them by appearance, design, color and size which you can see. But the service from salesman cannot be seen which is intangible.

Service is intangible in the two following aspects:

On most occasions service cannot be touched and felt because of its features and constitution elements; the customers’ feelings after being served is hard to measure or the benefit is felt some time later.

With the development of science and technology, some intangible goods service has become a ‘tangible’ one. In 1989 an Canadian economist proposed the concept of embodied service. For example, as the carriers of the service, the value of CD and tape can be neglected compared with the whole value in the supply because the main value is service.

This is the basic feature of service and it is the core and essence of service.

＊ Inseparability : The process of consumption is the process of production. This one

is easier to understand .

For example: service between teachers and their students, doctors and their patients, etc. That means service producers cannot supply service without service consumers and service consumers cannot enjoy service without the service product process.

But in embodied service the production and consumption of it cannot be happened at the same time.

＊ Perishability:

The accomplishment of production is the end of service process. If the service is not in use, the consumers can not enjoy the value of service.

Goods may not bring loss to the goods’ owners because goods can be stored after the period of production and before the period of consumption. But services cannot be stored in time and can not be transferred through space. If service is not provided in time, it can bring loss to consumers.

For example: the absent seat of a plane or a restaurant will be a loss to their bosses.

＊ Heterogeneity:

The quality of service covers large elasticity. It depends not only on service suppliers but also consumers. Normally the effectiveness of service is different from its quality and the difference are as follows:

1) The service quality is based on the techniques and quality of service suppliers while at the same time it also can be influenced by the consumers;

2) The demand of different service consumers could be different according to their education background, moral quality, social experience and individual personality.

[students’ reflection] could you please give us some examples to illustrate ‘Heterogeneity’?

For example:

① one travel agency to different tourists;

② one doctor to different patients

＊ Absence Ownership: In the process of production and consumption of service, the

ownership of any goods is not transferred.

Services disappear after the accomplishment of the transaction. Unlike the goods transaction, which you can get the ownership of your products, the service consumption right owned by the consumers cannot exist with the ending of service transaction because service easily disappears.

Example: deposit in banks. This is the root of service risks.

＊ Features of experiences and trust (经验特征与信任特征)

Different products tend to be expressed in different quality feature, which are evaluated by different experiences and trust of consumers.

The more visual the product is, the more easy to be evaluated.

1.3 Classifications of service (6 ways)

★ By tangible degrees of service

The more visible---the weaker service Examples: costume, soap, fast-food

The less visible--- the stronger service Examples: baby care, law service

★ By degree of customers’ involvement

The more participant in the process of production, the more services should be supplied. It can be classified into three aspects:

High contact e.g. cinemas, entertainment centers, public transportation

Medium contact e.g. banking service

Low contact e.g. mail service

Examples: libraries, schools, message and mail services.

★ By realistic effectiveness to consumers

⑴ Additional service ： a kind supplement service, which can not be supplied

independently, but with tangible goods. To customers the tangible one is the core product. E.g. when you buy a car you buy the design of it as well.

⑵ Core service: Consumers can independently buy with the core value. Example: tour service, internet bank service and internet shopping service.

★ By functions of service

⑴ Group service: government services

⑵ Financial service: bank service, insurance service

⑶ Sale service: goods transport, goods storage, passenger transport

⑷Special economic service: accountant, law, advertisement

⑸ Telecom and information service: telephone, telegram, electronic data

⑹ Construction service: construction scheme, consultant

⑺ Other services: renting, repairing, maintaining, news publishing and printing, etc.

★ By strategy of sales management

⑴ essential service

⑵ relation service

⑶ content service

⑷ supply service

⑸ extending service

★ By comprehensive factors of service

⑴ based on the supply tools

⑵ based on needs of individuals or enterprises

⑶ based on aim of organizations

⑷ based on customers whether appearing on the spot

Section 2. Understanding of service industry

[Students’ reflection] Last lesson we’ve learned the definition of service and related knowledge, can you think about what the ‘service industry’ is? Please share with us your ideas.

Definition: Service industry is the assembly of economic departments or enterprises that produce or provide various services.

Aim to develop service industry

★ To increase the utility value of goods, surrounding the production, circulation and consumption of physical products.

★ To improve the general quality of the country people.

2.1 Service industry and the third industry

Can you all remember when you see these words ‘the third industry’ at the first time? Do you still remember what is the third industry?

In the primary school and middle school, we have a course called Geography. We’ve learned the whole industry can be classified in three:

●The primary industry:

It means the departments of products that people can obtain directly from the nature by the effort of labor, such as agriculture.

● The second industry

It refers to the departments that process the products from the primary industry, such as industry and construction.

So what is third industry? Is it service industry?

● The third industry

It includes all the departments except from the above two industries according to British economist Fishery.

Now let’s compare with these two concepts.

There are great differences between service industry and the third industry both in the thinking method and theoretical logic.

1) Different definitions(界定不同)

All the economic activities excluding the first and second industries are called the third industry.

Service industry is decided by whether it supplies or produces all kinds of services.

Which is more specific?----service industry defined more specify which gives us a standard.

2) Different intentions(含义不同)

A. The concept of the third industry implies the traditional economic logic.

In traditional view, the high level industrial development relies on the low level industrial productions. For example, the second industry relies on the material supplied by the first industry; the third industry relies on the production supplied by the second and first industry.

The second industry relies on the materials supplied by the first industry; the third industry depends on the product supply of the first and second industries. It is a

single-way relying 单向依赖.

B. While the concept of service industry expresses the modern economic soul.

Service industry depends on the economic needs of different industries. This shows the mutual relying relationship between the service industry and other economic industries. It’s a kind of interdependent relationship.

3) Different objects

The third industry is oriented toward the domestic economy.

The service industry is facing to both the domestic and the international market.

From the first diagram we see that the third industry is totally different from the primary and second industry. But in the second diagram service industry has the interrelationship with each industry.

2.2 Service industry and manufacturing industry

What do you think of the relationship between service industry and manufacturing industry? Are they totally separated from each other?

Actually they act in two ways: mutual promotion and mutual integration.

★ Mutual promotion

In a perfect economic structure, manufacturing industry and service industry are interactive. Firstly manufacturing industry supplies large markets and strong demands to service industry. It provides so many opportunities for service industry for example promoting new productive service industry, such as information service, R&D design, educational training, physical distribution service, marketing management, human resources, etc. so that service industry can become stronger and more consummate.

For example, when you buy a PC, not only you buy the product itself but also the

The second industry

The primary industry

The secondindustry

The primaryindustry

The thirdindustry

The third industry

Service industry

additional service, such as the design, the software inside, the packing, fast delivery to your hands, service from salesman and even after-sale service.

On the other hand, service industry provides a good platform for manufacturing service as well, such as product distribution, high-tech, information, management and consulting service.

[students’ reflection]

could you please give us some example to illustrate the relation between the two industry?

One word to give you a clue.

Outsourcing. It means the company in order to achieve professionalization focuses on specialization. It diminishes or cancels some resources or services to focus on core competitiveness, but buying them from other professional companies. That is why the consulting companies, law firms and accounting companies flourish in these years.

Service industry has become the strong motive power in strengthening competition and development for manufacturing industry.

★ Mutual integration

1) Mixed development inside enterprises

Many companies have mixed together with service function and productive management. Even some turned from manufacture-centered into service-centered. In some world famous multinationals, service industry covers more and more percentage in productive value and benefits so that we feel hard to figure out if they belong to manufacturing industry or service industry.

For example, GE. General electric corporation, it penetrates its service into the daily management to transfer its manufacture function into the service function. At the same time, it develops greatly its finance by the world famous finance company GE capital to increase market competition rapidly.

2) Mixed development of industrial chain

What is industrial chain?

It involves R&D, procurement, manufacture, storage, transportation, sales and after-sale services.

What is the fact during the whole process?

We spend most of the time on R&D, procurement, storage, transportation, sales and after-sale services rather than manufacture. We call it productive chain. The efficiency of productive service affects the whole chain.

Nowadays in our country, the before-production service and afer-production service are not well-developed so that they affect the enterprise’s competitiveness.

According to some statistics American logistic cost covers about 9% of American GDP, whereas, Chinese logistic cost covers almost 20% of Chinese GDP. So we can see the difference.

3) Mixed development inside the region

How to understand it? Show you one place and you will understand it immediately----Wenzhou(China shoe town, China famous clothing town, World kingdom of lighters). It refers to the group development of manufacture and service in a special region. It can be called industrial cluster. In our country it has come to the period of industrial cluster closely related to industrial competitiveness. Industrial cluster are largely found in the Pearl River Delta and Yangtze River Delta.

What’s the advantage we get from industrial cluster?

Based on social divisions and specialized cooperation, the productive cost can be largely reduced.

[Conclusions] All in all----What’s the relationship?

1). Service industry accompanies industrial progress of manufacturing. They exist and develop mutually.

2). Service industry has the relationship of fusion and intergrowth with manufacturing industry.

2.3 Classifications of service industry

◆ Traditional service industry (3 kinds):

※ Life service: (in the range of life consumption)

Function: To maintain and promote the individual and family consumption

Example: repairing, catering trade, hairdressing and beauty, medical care, tour and accommodation, etc.

※ Productive service: (in the range of manufacture)

Function: To impel the development of social technique, improve the production development, promote the productive efficiency and to maintain the normal operation of production

Example: information consultant, productive material repairing, scientific and technical research, facility installing, etc.

※ Sales service:

Function: To promote the image & function of products and to ensure the quality and credit of products by various means.

Example: retail, wholesale, promote sales, banking, insurance, trust business, etc.

◆ Modern service industry (4 kinds):

※ Producer service (priority): productive business & special service, it’s non-final consumer service in the further production of goods and service.

Example:financial and insurance service, real estate;

※ Circulation service: retail & distributive service

Example:whole-sale and retail, transportation, telecommunication service, etc.

※ Consumer service: individual service

Example: hotel service, catering service, entertainment service, tourism service, etc.

※Social service: public service supplied by government and non-government

Example: health & medical care, education service, national defense, etc.

[Chapter Conclusion]

1. Service is a special invisible goods with its added value in the form of activities to satisfy the needs of economic individuals. It is different from the tangible goods in economics.

2. Relatively to tangible goods, service regularly has the features of intangibility, inseparability (space-time consistency between production and consumption), perishability, heterogeneity, and absence ownership.

Among all the above features, intangibility is the basic one and is the core and essence of service, which derives other features.

3. Service can be divided into several kinds by tangible degree, customers’ involvement degree, realistic effectiveness to consumers, function of service and strategy of sales management.

4. Service industry has different definitions and intentions from third industry but has the relationship of mutual promotion and integration with manufacturing industry.

【Questions】1. Please explain your understanding of service and service industry?

2. What are the basic features of service? Please provide examples if possible.

3. What are differences between service industry and the third industry?

4. What are the relationship between service industry and manufacturing industry?

【References】

[1] Marshall Reinsdorf and Matthew J. Slaughter. International Trade in Services and Intangibles in the Era of Globalization [M]. The University of Chicago Press, 2009[2] Aaditya Mattoo, Robert M. Stern, and Gianni Zanini. A Handbook of International Trade in Services [M]. Oxford University Press, 2008

[3] 陈双喜, 魏巍, 冯琳. 国际服务贸易（第二版）[M]. 大连：东北财经大学出版社，2009

Chapter 2 Basic Categories of International Trade in

Services（8hrs.）【Teaching Purposes and Requirements】● Grasp the definition and characteristics of international trade in services;

● Understand the classifications and features of international trade in services;

● Familiarize with the statistical methods of international trade in services.

【Learning Objectives】This chapter mainly explains the concept of international trade in service, the classification of it and the statistical methods.

【Key and difficult points】Understand the classifications and features of international trade in services;

Familiarize with the statistical methods of international trade in services.

【Teaching Contents】Step 1:

Section 1 Concept and characteristics of international trade in services

[students’ reflection] Do you still remember what is the definition of international trade?

Key: exporter importer

1.1 Concept

▲Traditional definition:

When a labor in one country supplies service to the service demander (natural person, legal person and other organization) of another country to obtain foreign currency income following a compensated and voluntary principle, which constitutes the service export.

So following the picture. (in ppt)

On the contrary, the demanders of one country become the consumers of the services,

goods and products

Foreign currency

Following a

compensated and

voluntary principle

supplied by the service producers of another country, thus service import has been formed.

The definition involves service suppliers (labors), nationality, national border, residents and non-residents. So, three fields should be clarified:

(1) Connotation and extension of “Labor”: all the service suppliers, including individual suppliers and group suppliers.

(2) Different nationalities of “labors” and “services demanders”: direct investment and local employees

If foreign direct investment involved in, the service demanders and suppliers are both in one country, can we call the international service trade happen?

one country

Local labors: service suppliers who provide services on behalf of the foreign investors.

(3) Whether service crosses border and whether “national person” moves:

service needs to be crossed

Telecom:

Direct local Investment labors

Local suppliers & local demanders

national person does not need to be moved

national person needs to be moved

Tourism &

medical care service does not need to be crossed

▲ Definition in GATS

GATS: 《General agreement on trade in services》﹟ Definition: the business activities of cross-border service trade;

﹟ a kind of transaction action by which service suppliers from one country offer the service to consumers in another country and gain the foreign currency income in the form of business or in the way of commercial presence of natural persons.

﹟ This definition has been accepted popularly by all the countries, which contains four ways of trade in services:

⑴ Cross-border supply（跨境交付）:

Neither service producers nor service consumers move. Suppliers in member country A supply service from the territory of its own to customers in the territory of member country B.

e.g. audio, broadcasting, stock (share) finance, tele-message

⑵ Consumption abroad（境外消费）:

Suppliers in member country A supply service inside its own country border to the coming consumers of member country B.

e.g tour reception (supply tour service to foreign tourists)①

② patient reception (supply medical service & facility to foreign patients )

③ foreign students reception (supply educational service)

⑶ Business presence（商业存在）:

Suppliers in member country B move to set up the organization in member country A to supply service with gaining in country A.

e.g joint venture investment, cooperation, sole proprietorship

Service suppliers can either come from the home country or be hired locally in the host country; their targets can either be consumers in the host country or in a third country.

⑷ Movement of personnel（自然人流动）:

Individuals in member country A move to member country B to supply service inside B country to the consumers, both of Country B and coming from member country C.

▲ Definition in US-Canada Free Trade Agreement:

Service is defined here as an “appointed service” （ 所 指 定 的 一 项 服 务 ） ,

provided by a person representing other contracting parties in its own territory or into territory of another contracting party.

Appointed services include:

⑴ purchase activities: production, distribution, sales, etc.

⑵ restrictions of contracted countries: market permission & distribution systems

⑶ comprehensive process of forming commercial (business) presence, including distribution, sales transferring, etc.

⑷ investment or related activities: managing, organizing, maintaining or transferring, loaning, etc.

▲ Definition in BOP

BOP :Balance of Payment (国际收支平衡表)

Service in regular items in BOP refers to the trade in services between residents and non-residents.

Resident: a natural person who lives in the territory of the country for one year or a legal person who provides service or goods production in its own business premises.

International trade in services defined by BOP is cross-border trade in services.

1.2 Similar concept of international trade in services

International trade in services & International trade in goods ★

Productive elements:Visible products

Productive elements:Personnel, capital, Technology, Knowledge

The relation between the two is that part of trade in services is accompanied by the happening of goods trade, which is called additional trade in services, such as after-sale service and transportation service.

International trade in services& invisible trade★

The two are generally equal. But in fact the range of invisible trade is broader than

trade in services. Except for all the items in trade in services, it still includes income and expenses of direct investment and contribution, donation etc. In the whole invisible trade, the item of direct investment takes the biggest share. Some experts said 60% of the FDI accounts for service trade.

International trade in services & Service industry★

Service industry includes consumer service, productive service, distribution service and government service.

Trade in services includes consumer service, productive service and distribution service.

International trade in services&International service exchange ★

First, the government sends personnel and experts to each other who offer various services free of charge. For these services do not produce commercial profit, the transfer of service personnel is not the trade in services.

Second the service personnel of one country goes abroad for searching a job. They are employed by the local boss, getting payment and consuming money in local areas. It cannot be called trade in service either for there is no payment crossing the border.

Third natural person of one country offers services to foreign countries and gets payment for their services. Since there is cross-border flow of income and expenses, it’s trade in services.

1.3 characteristics of international trade in services

◆ intangibility(无形性): Target species of service trade is intangible.

◆ synchronism & internationalism (同步性和国际性):

Productions and consumptions simultaneously happen

◆ flexibility& elusiveness (隐蔽性):

※ The approach of non-tariff barriers is the way to protect service trade, which can make different regulations for different products, such as technical standard,

accreditation (资格认证)

※ The restriction to service trade means market permission and domestic legislation, which can not be negotiated among different countries.

◆ complexity:

※ wide range of trade

※ management of nature person movement

※ administrative regulation applying to trade development

2. Classifications of international trade in services 2.1 statistical classification

statistical classification is a kind of operatively applicative classification.

The aim of it is to record and measure the scale and structure of the trade from one country to other countries within a certain period of time.

The realization of those statistics should via the form of regulation and balance of

payment account unified by IMF (International Monetary Fund 国际货币基金组织 )

In this way it can be classified into two ways: trade in factor services and trade in non-factor services.

(1) Trade in factor services: related capital items in the balance of international payment account. See P33

It refers to the international transfer of capital gain flow. In real international economic system, capital flow or financial assets flow are mainly realized through international investment and international credit.

International investment can be direct or indirect.

International direct investment aims to obtain direct right of management and control of assets. Therefore earnings of international direct investment contains two parts: flow of capital elements, for example interests and dividends and flow of administrative elements for example profit from business operation.

International indirect investment are also called international portfolio investment.

The aim of it is to gain the interests or dividend yield (股息收益) of financial capitals.

For example in international stock market you can buy stocks or bonds issued by foreign enterprises and buy government bonds issued by foreign government.

International credit has three fundamental ways:

＊Civil international credit(folk credit) : commercial credit & bank credit

Commercial credit are international borrowing and loaning among enterprises by means of import and export credit and lease credit.

Bank credits are international loans of commercial banks.

＊ International financial institution credit means loans offered by the global and

regional international financial institution e.g. World Bank, IMF to their member

countries. Asia Development Bank, Latin-American Development Bank, etc.

＊ Inter-government credit means credit to foreign government with preferential

interest rate

(2) Trade in non-factor services

Because the content of it is too numerous and diversified it’s hard to give a standard definition. We say all the trade in services except the one in factor services.

Formula:

Flow of non-factor service trade

﹦flow of international trade in service － flow of trade in factor service

﹦(flow of regular item － flow of trade in goods － unilateral transfer payment) － flow of trade in factor service

In conclusion:

Statistic classification: practical classification, more experienced and in lack of theory

Logical classification: theoretical classification, more rigorous, reasonable and easy to make the research

2.2 logical classification

(1) By the standard whether trade in services is accompanied by trade in tangible

goods （以是否伴随有形货物贸易为标准）★ International trade in additional services

International trade in additional services is a kind of international trade in services associated with international trade in tangible goods. To consumers the core value is the product itself and service accompanied takes additional value.

When you eat meals in the restaurant you will inevitably receive services offered by the restaurant and attendents. But the core utility you will pay for is the food instead of services.

Service that are characterized by additional services include transportation, warehousing and communication related to circulation.

As consumers and enterprises place increasing emphasis on additional services, there is increasing social demand for various types of additional services. Therefore a lot of new enterprises dedicated to offering services emerge.

Enterprises in all countries place much emphasis on additional input and applications

in each process of goods production:

① at upper phase 上 游 阶 段 : feasibility study, venture-capital formation, market

research, product conception and design (产品构思与设计)

② at the middle phase: quality control and inspection, equipment leasing and supplying, equipment maintaining and repairing, employee training, software collection, law, real estate managing, insurance logistics services

③ at lower phase: advertisement, transportation, direction for use, after-sale services including compensation

★ International trade in core services

On international trade in services market, service is the core object of market demand and supply.

According to the way a service provider gets in contact with a demander:

① long-distant services 远距离服务 e.g. international communication, internet, telegram, fax, audio-service,

② face-to-face services面对面服务 e.g. international medical services, international tour services, third-country trade

(2) By the standard of service industry （以服务业为标准）According to different characteristics of various sectors in service industry and based on certain activities , trade in service can be classified into seven categories:

＊ banking and financial services

＊ insurance services

＊ tour services

＊ air parcel and port traffic services

＊ architecture and engineering services

＊ professional services

＊ information, computer and telecom services

(3) By the standard of factor intensity（以要素密集度为标准）In the light of intensity required for inputs of capital, technology and labor into trade in services, some economists have divided trade in services into:

＊ capital intensive services

e.g. air transport, telecom, project construction

＊ technology and knowledge intensive service

e.g. banking, finance, law, accountant, information services

＊ labor intensive service

e.g. tourism, maintenance, consumption services

(4) By the standard of production process（以生产过程为标准）

There are various types of productive services in process of production and management of enterprises. In production process the services can thus be divided into pre-production service, in-production service and post-production service, which we’ve already learned in the additional trade in services.

＊ service before the production process

e.g. feasibility study, risky capital formation, market research, product conception and

design (产品构思与设计)

＊ service in the production process

e.g. quality control and inspection, equipment leasing and supplying, equipment maintaining and repairing, employee engaging and training, software collection, law, real estate managing, insurance, security, logistics services

＊ service after the production process

e.g. advertisement, transportation, direction for use, after-sale services including compensation

(5) By the standard of goods（以货物为标准）＊services expressed by goods or materialization:

e.g. film, TV, books, computer, etc.

＊ services to supplement goods:

e.g. storage and transportation, financial management, advertisement

＊ services accompanying and replacing goods:

e.g. franchise management, equipment and financeleasing, equipment repairing

＊service with the function of goods but irrelated to goods:

e.g.: telecom, tour, hotel and restaurant

Section 3. Statistics of international trade in services

3.1 Development of statistics of international trade in service

3.2 Statistical System

(1) BOP statistic : Balance of Payment

BOP statistics is a relatively authoritative way to reflect the status in quo of global trade in services. It can reflect the flow and size of all sorts of transations of a country with foreign countries or overseas regions in certain period.

It refers to business transactions between residents in a country and non-residents.

Residents refer to

＊ natural person who lives in the country for at least 1 year

＊ enterprise legal person with business places to supply goods and business

Therefore it’s obvious to see that international business trade defined by BOP means the cross-border transactions. For example, cross-border trade contains cross-border

supply过境交付, consumption abroad 国外消费, movement of personnel 自然人流

动.

According to BOP statistics, trade in services flows in balance of payment accounts are divided into trade in factor services and trade in non-factor services. The former one relates to capital items which are relavant to international capital flow or financial assets flow. While the latter relates to current account, as illustrated in Table2-3.

[Students’ reflection]What’s the defect of BOP statistics?

Ignoring another form: commercial presence(Business presence: suppliers in member country B move to set up organizations in member country A to supply service with gaining in country A. )

Table2-3

International trade in services

国际服务贸易

Non-factor

trade in

services

accounts

非要素服务贸易项目

Transportation/communication ① 运输、通讯

Tourism (hotels and restaurants) ②

旅游（旅馆和餐厅）

Financial service ③ 金融服务

Insurance service ④ 保险服务

Professional services (intellectual property,⑤ consultation, management, technical services)

专业服务（知识产权、咨询、管理、技术服务）

Privileged use items (license) ⑥

特许使用项目（许可证等）

Other private services ⑦ 其他私人服务

Factor

trade in

Services

accounts

要素服务贸易项目

Dividend (incl. profits) ① 股息（包括利润）

Interests ② 利息

Foreign re-investment income ③ 国外再投资收益

Other net capital gains ④ 其他资本净收益(2) FATS statistics– Foreign Affiliates Trade in Services

FATS statistics reveals the transactions of all commodities and services of foreign affiliates in host countries, including transactions with the parent country of investment, with other residents in the host countries and with a third country.

The core is that service trade happens within the border.

As we all know direct investments are bidirectional which includes direct investments both from and to foreign countries. Thus the internal and external FAT emerge.

Statistics revealed transactions implemented by foreign affiliates in home country is called internal FATS statistics. Statistics recorded transactions of affiliates of national investments in host country is called external FATS statistics.

3.3 Statistics of China International Trade in Service

In fact in China statistics of International Trade in Service started quite late. For a long time we didn’t have normative statistics but BOP statistics which is not elaborate in data classification.

In 1982 we worked out and published BOP data.

In 1996 《 Procedures Governing the Declaration and Statistics on International

Receipts and Payments》《国际收支统计申报办法》was carried out gradually. So far,

we’ve set up a data collection system.

Meanwhile Ministry of commerce has set up different statistics system for FATS. Statistics of internal FATS and external FATS is mature.

Chinese financial institutions have already covered parts of FATS, such as China

Banking Regulatory Commission( 中 国 银 行 监 督 委 员 会 ), China Insurance

Regulatory Commission( 中 国保险监督委员会 ) and China Securities Regulatory

Commission( 中 国 证券监督委员会 ), which lay the foundation of statisctic of

financial FATS.

On Jan. 1, 2008, 《Statistic System of International Trade in Services 》is put in effect,

which is subject to Foreign Trade Law of The People’s Republic of China《中华人民共和国对外贸易法》and Statistics Law of The People’s Republic of China《中华人民共和国统计法》.And it’s in accord with《General Agreement on Trade in Services》

《服务贸易总协定》and 《Manual on Statistics of International Trade in Services》《国际服务业贸易统计手册》.

[Chapter Conclusion]

1. International trade in services has different definitions:

＊ traditional definition,

＊ GATS definition,

＊ <US-Canadian Free Trade Agreement> definition

2. GATS has four modes of definition:

＊ Cross-border supply

＊ Consumption abroad

＊ Commercial presence

＊ Natural personnel movement

3. Compared with trade in goods, international trade in services has the features such as:

＊ intangibility of trade target;

＊synchronism & internationalism of production and consumption;

＊ flexibility & elusiveness of trade protection;

＊ complexity of management.

4. The classifications of international trade in services are theoretical and logical:

＊ Theoretical classification (practical): trade in factor services and trade in non-

factor services

＊ Logical classification (theoretical): 5 types

① by the standard whether trade in services is accompanied by trade in tangible goods

② by the standard of service industry

③ by the standard of factor intensity

④ by the standard of production process

⑤ by the standard of goods

5. Statistics of international trade in services are the bases for theoretical research and information resources for management.

＊BOP statistics: transaction between residents and non-residents

＊FATS statistics: commercial presence of affiliates

[Chapter Quiz]

1. Briefly review the GATS definition of trade in services.

2. What are the characteristics of international trade in services?

3. What are the characteristics of BOP statistics and FATS statistics?

【References】[1] Marshall Reinsdorf and Matthew J. Slaughter. International Trade in Services and

Intangibles in the Era of Globalization [M]. The University of Chicago Press, 2009[2] Aaditya Mattoo, Robert M. Stern, and Gianni Zanini. A Handbook of International Trade in Services [M]. Oxford University Press, 2008

[3] 陈双喜, 魏巍, 冯琳. 国际服务贸易（第二版）[M]. 大连：东北财经大学出版社，2009

Chapter 3 Theory of International Trade in Services(8hrs.)

【Teaching Purposes and Requirements】● Understand the relative theory of services;● Grasp the constitution of theory of service value so as to distinguish the theory of

service value and value-in-use;● Familiarize the Petty-Clark Theorem;● Know about Path theory on service development;● Master the relative theory of the trade in services.

【Key and difficult points】Familiarize the Petty-Clark Theorem;Know about Path theory on service development;

【Teaching Contents】Section 1 Relevant Theory on Services (2hrs.)

1.1 Theory of service value（服务价值理论）1.1.1 Proposal of service value（服务价值的提出）1.1.2 Explanation of service value （服务价值的理解）1. There are two conditions to follow for the labors creating values according to the labor theory of value: (1) Create value-in-use; (2) For the exchange, no matter it is in material form or non-material form.It can be testified by the labor theory of value that service industry creates value: service creates value → service use value → value and its magnitude of service products → value-in-use and exchange value of service products → valuable non-material labor results (service products)2. Two reasons to adopt the non-physical labor results into the range of social products:(1) Essential reason: The non-physical labor-result, same as the physical one, has the function to satisfy the demands of human being.(2) Historical reason: At present, the rapid development of service makes it necessary to break through the material products range, which is the assembly of physical labor-result and non-physical labor-one to satisfy the demands of people in certain period of time, including physical products and service products.1.1.3 Constitution of Service Value（服务价值的构成）(1)Value-in-use of services（服务的使用价值）(2) Service Value（服务的价值）

(3) Quantity of Service Value（服务的价值量）① Constant capital②Variable capital③ Marketable surplus value

1.2 Utility Value of Service（服务效用价值理论）1.2.1 Theory of utility value（效用价值理论）1.2.2 Utility value of service（服务的效用价值）1) In the view of constitutive factors(从构成要素看), regularly, the human capitals,

labors and object capitals cover different proportions to decide the utilities and the values in the service markets. Therefore, some services, in function, look like human capital intensive ones, whereas some services belong to physical capital intensive ones, and other services yet belong to labor intensive ones.

2) In the view of supply(从供给特点看), the special mode of service production is

different from the one of commodity production, which affects the relation of economic structures and social political structures.

All the elements of service products are classified into tangible ones and intangible ones. The inexperienced labors and physical capital are tangible units that can be accurately measured in certain market and dominated by the traditional theoretic supply-and-demand analysis. Human capital can not be measured like the above so easily, but it plays more and more important roles.

Section 2 Relevant Theory in Service Industry (2hrs.)

2.1 Petty-Clark Theorem（配第—克拉克定理）2.1.1 Birth of Petty-Clark Theorem（配第—克拉克定理的产生）What’s the Petty—Clark Theorem?

Clark testified the relative regulation found by British classical economist W.

Petty and said in the book Conditions of Economic Progress（《经济进步的条件》） that the labor force is transferred from agriculture to manufacture, then from manufacture to business and services. With the development of national economy and the increase of national income per capita, agricultural labor forces are reduced rapidly. The proportion of manufacture labor forces is in synchronous increase with economy but normally it is stable after reaching 40%, yet that of service is constantly increased. This is the world-famous theorem in the field of economy called ‘Petty—Clark Theorem’.

2.1.2 Explanation of Petty-Clark Theorem（配第—克拉克定理的解释）1. Shortcomings in Petty-Clark Theorem1) The theorem is not so typical and popular because it does not cover enough numbers of countries and regions.2) It only adopts the single labor force index, which can not completely reveal the general tendency of the complicated industrial structures.2. The later economists have made a further complementary theory and a test of this theorem

1) American economist, statists Kuznets（库兹涅茨）shows a further test to Clark

theory by sumptuous data materials.

2) French economist Fourastie（富拉斯蒂埃）says that the data we get fully testifies

the laws of evolution.

3) French economist E.Sauve（索维）also proposes the relative analyses.

2.2 Path Theory on Service Development（服务业发展路径学说）2.2.1 ‘Internal’ evolution to ‘external’ one（‘内在化’向‘外在化’的演进）

In the developing process of service industry especially consumption services and production services, a regular tendency exists: an evolution from ‘internal’ to ‘external’, or from ‘non-market’ to ‘market’.

2.2.2 Supply model of family services（家庭服务提供模型）Above all, the increase of women’s participation in work leads to market service

purchasing in the place of home service self-supply. Meanwhile, it is clear to reflect on the increase in the rate of women’s work participation the change of market work flavor and women employment concept, the rise on the rate of payment and the rate of wage spending that expresses the reduction of market service prices will bring about the increasing women’s participation in work. On other way round, this can accelerate market services in place of home services, which means to promote consumption services – a transferring from ‘internal home service’ to ‘external one’.

Section 3 Relevant Theory on Trade in Services (2hrs.)

3.1 Research on service trade by traditional trade theory (传统贸易理论对服务贸易的研究)

At present, the academic fields consist of three ideas: non-application theory, application theory and improvement theory.

1) Non-implication theory(不适用论)

2) Application theory(适用论)

3) Improvement theory(改进论)

3.2 Research on service trade by modern trade theory (现代贸易理论对服务贸易的研究)

3.2.1Theory of new trade and trade in services (新贸易理论与服务贸易)

(1) In 1986, Markusen ( 马库森 ) analyzed the effect of scale economy on trade in

services in the example of producer service trade.

(2) In 1987, (基尔兹克斯 ) explained to cancel the international effect on domestic

service restriction in the model of oligopoly.

(3) In 1988, R.W.Jones (琼斯) and (基尔兹克斯) probed into the effect on service

trade on the condition of scale economy.

(4) In 1988, Markusen (马库森) did a special research on the problem of service trade

in experienced labors.

(5) In 1989, Markusen (马库森) established a equilibrium model of two departments

to probe into productive service in the scale economy and international trade in other specialties.

3.2.2 Theory on competitive advantages(竞争优势理论)

(1) Theoretical connotation of competitive advantages(竞争优势理论的内涵)

1.Theory connotation of competitive advantage can be traced back to classical school

of economics (古典经济学派),whose representative is Adam Smiths(亚当·斯密), and

has been formed in the debating between classical school of economics and

merchandise theory(重商主义学说).

2. After the middle period of 20th century, especially 80s, the trilogy of Michael Porter

(迈克尔·波特) had promoted national competitive theory to the dominant position in

the line of competitive theory.

(2) Application of competitive advantage theory to service trade ( 竞争优势理论对服务贸易的适用)

Why porter’s theory is adapted to service trade?

Porter’s competitive advantage theory applies to service trade. Porter’s national competitive advantage theory can explain rather completely the competitive pattern in service trade. So it should be led to the research field of international service trade to analyze the inner connection between service trade and national competitive advantages, and to point out that service trade can bring a strong competition to manufacturers and even trade countries.

3.3 From comparative advantages to competitive advantages of service trade (从服务贸易的比较优势到竞争优势)

3.3.1 Relationship between comparative advantage and competitive ones (比较优势与竞争优势的关系)

(1) Differences (区别)

① Comparative advantage is one concept in economics, yet competitive advantage belongs to the concept in management.② Comparative advantage involves into market price mechanism emphasizing price competitions, but competitive advantage refers to enterprises and industries stressing on non-price competitions.③ Comparative advantage concerns the element supply quantities; however competitive advantage pays attention to the demand levels in product markets.

④ Comparative advantage adopts the analysis method in regular equilibrium(一般均衡 ) and static equilibrium(静态均衡 ), though competitive advantage introduces a

kind of method in non-equilibrium dynamic analysis(非均衡 的 动态分析法 )and

partial analysis method(局部分析法).

(2) Relations(联系)

① The exogenous comparative advantage is a kind of price competitive advantage as well.② Comparative advantage and competitive advantage are both restrained by the lack of resources.

③ Some parts of important problems in the theory of comparative advantage are in accordance with that of competitive advantage.

④ Comparative advantage and competitive one will play the same role once foreign trades in one country industrial development happen.

⑤ The industry with comparative advantage in one country is easy to form The strong competitive advantages.

⑥ Comparative advantage can be expressed only by competitive advantages ，even

for the industry with comparative advantages.

⑦ The essence of both comparative advantage and competitive one is the international comparing in productivity.

3.4 Development of competitive advantage theory in service trade (服务贸易竞争优势力理论的发展)

On this base, the elements in service trade to support enterprises and national competitive advantage can be disintegrated into six following ones:

(1)Element of service technology (high technology)

(2)Service resources element:

(3)Service management element:

(4)Service market element:

(5)Service capital(investment) element:

(6) Service products element

【Practices】Case study (2hrs.)

Case materials (please refer to the cases book)

【Questions】1. How do you understand service value after learning this chapter? What does the

value quantity of service products consist of?

2. What is the utility of service value？Which are the two parts to consist of utility of

service value?3. What is Petty-Clark Theorem? Explain simply the reason to form such a phenomenon.

【References】[1] Marshall Reinsdorf and Matthew J. Slaughter. International Trade in Services and Intangibles in the Era of Globalization [M]. The University of Chicago Press, 2009[2] Aaditya Mattoo, Robert M. Stern, and Gianni Zanini. A Handbook of International Trade in Services [M]. Oxford University Press, 2008

[3] 陈双喜, 魏巍, 冯琳. 国际服务贸易（第二版）[M]. 大连：东北财经大学出版社，2009

【Reading Material】Service Economy and National Competitive Advantage

----Analysis on Model of ‘Porter Diamond’

Chapter 4 Policy of International Trade in Services（6hrs.）【Teaching Purposes and Requirements】● Learn the theory basis of the policy of liberalization and protectionism;● Learn the policy choice in developed countries and developing countries;● Master the characteristics and classifications of barriers of ITS;● Master the policy instruments of protectionism.

【Key and difficult points】Learn the theory basis of the policy of liberalization and protectionism;Master the characteristics and classifications of barriers of ITS;

【Teaching Contents】

Section 1 Evolution of Trade Policy in Services (2hrs.)To learn the evolution of ITS policy: from protectionism to liberalization.

1. Evolution of services trade policy（服务贸易政策演变）1）In a period after World War II, to revive economy, some western countries

introduced a large number of service personnel from abroad and encourage technology transfer and inbound financial services, allowing service trade to embark on organized and commercially oriented development.

At that stage, in developed countries, there were few barriers to services trade, but the developing countries were not active in services trade; instead, numerous barriers were set up, and the importation of overseas service was restrained.

2）From the national perspective, due to more competitive domestic services, the

developed market economic countries may advocate liberalization of service trade, ask developing countries to open up services markets for entry of their advantageous service industries.

Section 2 Policy of Trade Liberalization in Services(2hrs.)Basic knowledge: relation between liberalization and economic efficiency; welfare analysis of liberalization of trade in services; policy selection of liberalization of trade in services.

2.1 Free trade and economic efficiency（自由贸易与经济效率）2.1.1 Relation between productivity increase and liberalization（生产力的提高与自由贸易的关系）The link has various clarification: (1) dismantled trade barriers make competitors in

pure competition, thus productivity is increased; (2）Liberalization allows firms to

participate in a wider range of international market competition; (3) Macroeconomic stability combines with liberalization effect.

2.1.2 Theory of new growth （新增长理论）The new growth theory stresses four productivity-increasing endogenous variables: to increase revenue brought by specialization, more labor resources and learning-by-doing performance and profit from R&D investment. In the four endogenous

variables, Positive Externality（正的外部性）leads to higher productivity growth.

2.2 Welfare analysis of liberalization of trade in services（服务贸易自由化的福利分析） 1) Welfare analysis is an important part in international trade theory. The theory based on the traditional international goods presents that liberalization can bring in the best of the increase in economic welfare. The welfare effects of liberalization in services are more complex than trade in goods.

2) Liberalization of international trade in services based on the welfare policy is the main source of comparative advantage theory, formed under the social division of labor benefits, including consumer surplus and producer surplus in two parts. As the service trade itself is invisible, so liberalization of trade in services also evolved into trade in services liberalization, the welfare analysis is also transformed into the basis of the theory of comparative advantage which is based on the liberalization of factor mobility services trade and has impact on importing and exporting countries.

2.3 Policy selection of liberalization of trade in services（服务贸易自由化的政策选择）2.3.1 Macro impact of liberalization of trade in services (服务贸易自由化的宏观影响)

The liberalization of trade in services in the country brings welfare more than trade in goods liberalization under the same conditions corresponding to the development, otherwise, it will result in loss of state benefits.

(1) Liberalization of trade in services and national security(2) Liberalization of trade in services and national competitivenessServices trade liberalization promotes professional development services, and

professional services sector generated the one hand, economies of scale, on the other hand lead to standardization of technology services and service integration.

On this basis, trade in services give companies or countries a competitive advantage which can be decomposed into six basic elements: ⑴Services

Technology； ⑵ Service resource;⑶ service management; ⑷Market; capital; ⑹ service products.

In short, the liberalization of trade in services is not only related with a number of sensitive issues such as national security, especially economic and cultural security, but also an increasingly strong and more widespread influence on the improvement of the competitiveness of the national economy. Because of this,no country is willing to open its service market fully yet, and no country tends to implement strict import of services substitution policy.

2.3.2 Policy orientation developed countries for liberalization of service trade(发达国家服务贸易自由化的政策取向)

Developed countries’ liberalization of services trade policy is mainly reflected in:

(1) to open their commodity market as the conditions for developing countries to open their services markets;

(2) for the same level of development of the country or region, they need to open their markets to each other;

(3) On the grounds of protecting national security and competitiveness, they take control of their services exports.

In addition, on the ground of safeguarding national security and competitive advantage, the developed countries claim that they need to take control policy on exporting their services.It need to be pointed out that the developed countries force developing countries to open services markets , and restricting their exports of services involving sensitive issues , which are all to their own interests. Developing countries must take appropriate measures to this.

2.3.3 Policy orientationdeveloping countries for liberalization of service trade(发展中国家服务贸易自由化的政策取向)

Developing countries can not choose the traditional protection strategies, particularly as the traditional import substitution strategy in industry,and can not choose one-step full liberalization strategy. therefore, mixed, progressive liberalization of services trade development strategy is taken as the option for developing countries.

For developing countries, in the process of services trade liberalization, two points should be noted:

First, the basic steps and the sequence of opening; Second, the basic steps and sequence and which services department or

community Service are related , and how they impact service market opening.

According to this thinking, the opening up of services markets for developing countries can follow the following five steps:

(1) gradually relax control of the domestic services market;

(2) the gradual opening up of their merchandise trade market, lowering commodity tariffs;

(3) gradually open service market, reduce service products in the field of non-tariff barriers;

(4) gradually open elements market of srevices, reduce tariffs on trade in services

and tangible non-tariff barriers;

(5) achieve liberalization of trade in services

Section 3 Policy of protectionism of trade in services (2hrs.)To master trade barriers and its classifications; to learn the measure of trade in services protection level; to learn the comparison and selection of protective policy of trade in services.

3.1 Service trade barriers and types（服务贸易壁垒及类型）3.1.1 Cause of barriers to services trade（服务贸易壁垒产生的原因） Since the liberalization of trade in services to the trading nations can bring certain benefits, then why in trade in services in the real economy, there are more barriers than that in trade in goods? There are at least three reasons:

(1) source of micro-economics is the main basis for the government to implement interference with the natural monopoly, asymmetric information and economic externalities.

(2) The consideration for their economic independence. (3) Political and cultural considerations.

3.1.2 Service trade barriers and types（服务贸易壁垒及类型）According to the GATT of the WTO statistics, there are more than 2,000

international service trade barriers. And similar to goods trade, services trade barriers are generally divided into two major categories - tariff and non-tariff barriers, different from goods trade, theories of non-tariff barriers in trade in services play a more important position. There is much discussion of classification of the services barriers trade, here are two categories: R. Baldwin will mainly classify trade barriers into 12 kinds , U.S. economist S. Bentz will take the 11 species into two categories applied to services. The first is investment / ownership issues, including the following:1, limiting profits, fees and royalties remitted back to the home country; 2, restrictions on foreign branches of all or part of the shares held or controlled by the local people, which is basically the same in a total ban on foreign companies entering the local market; 3, labor restrictions, such as requirements to employ local workers, professionals, subject to certification and to obtain visas and work permits; 4, discriminatory taxes on foreign companies, such as additional income, profits imposed on unequal taxes or royalties, etc.; 5, on the intellectual property, trademark, copyright and technology transfer, lack of adequate information such as trade protection. The second category is the trade / investment issues, including the following: 1, government subsidies to local enterprises and help them participate in local or third country markets;

2, government-controlled agencies frequently perform some non-profit objectives to limit foreign producers’ competitive advantage; 3, burdensome or discriminatory licensing requirements, fees or taxes;

4, some of the necessary foreign companies impose high tariffs on imported material, or direct quantitative restrictions, or even prohibit the import; 5, not performing international standards and practices of production services; 6, restrictive or discriminatory government procurement regulations.

Service trade barriers will be divided into four forms as product movement, capital mobility, barriers to movement of persons and commercial presence. (1) Product moving barriers. Product mobile barriers include quantitative restrictions, local content or local requirements, subsidies, government procurement, discriminatory technical standards and tax system, and the out-dated protection system of intellectual property and so on.

(2) Barriers to capital mobility. The main forms are exchange controls, floating exchange rates and export restrictions on investment income.

(3) Personnel movement barriers. Various immigration restrictions and immigration red tape, and the resulted long waits, etc., constitute barriers to the movement of persons.

(4) Barriers to commercial presence, barriers and producer also known as the right of establishment business barriers that limit market access to foreign service firms to set up their own business or company.

3.2 Measure of service trade protection level（服务贸易保护程度的衡量）3.2.1 Nominal rate of protection (NRP)（名义保护率）Indicators is most commonly used to measure the degree of trade protection. It measures world market prices and domestic market prices. World Bank nominal protection rate is defined as: the domestic market prices caused by protection and the percentage of international market prices. Nominal protection rate is the tariff protection of a country's domestic market commodity makes prices higher than the percentage of international market prices, the formula is:

NRP= domestic prices- import prices／import prices×100%

3.2.2 Effective protection rate (ERP) （有效保护率）ERP 有效保护率=Value-added domestic processing-Import value-added processing

／Import value-added processing×100%

Te=T-∑aiti/1-∑ai

3.2.3 Producer subsidy equivalent (PSE) (生产者补贴等值)

Subsidies to producers or producer subsidy equivalents such as the coefficient (PSE coefficient) method was first used for Economic Cooperation and Development Organization for its members to agricultural policy and agricultural trade analysis.

3.3 Comparison and selection of protective policy of trade in services（服务贸易保护政策的比较与选择）3.3.1 Tariff, subsidy and quota（关税、补贴和配额）In the area of merchandise trade, tariffs, export subsidies and import quotas is this: It can bring the government tariff revenue while export subsidies have to increase government spending. In addition, from the point of view, the terms of the government are limited, so they are always more willing to choose their increases or tariff policy on its government revenue and will put the future-benefit export subsidies at the bottom of its policy basket. Generally tariff is better than the import quota. If a country wants to use the import quota policy, then this protection policy which is taken in order to reduce the degree of economic distortions should firmly implement the import license auction system to prevent rent-seeking behavior.

It can be concluded that: From the point of economic costs, subsidies to output> tariff> = quota

3.3.2 Import restrictions, opening barriers and control（进口限制、开业障碍和管制） (1) Import restrictions(2) Opening barriers

The right of establishment is often politically sensitive issues involved, but from an economic point of view, it is a simple way of sale of services imports choice. If you want import-competing industries to support their policy, the best way is to subsidize these industries, second-best way is to heap on the ground or through taxing the opening of service trade in the Foreign Service to prevent foreign competition in the efficiency of service providers (such measures often do not bring financial benefits to the government). Different from goods trade, to ban the opening and quantitative restrictions, whether from the perspective of economic efficiency, or revenue from the financial point of view, will be difficult in the long term.

(3) Control Government regulation makes domestic service consumers get fair economic interests or the interests of consumers with some protection from the domestic service companies against low-quality services. Theory had to protect their own services to

consumers (that is to improve the situation of adverse selection of consumers) to limit moral hazard, national service providers, the measures, an objective of foreign service providers, competitive inhibition played . Therefore, the Government must be clear that the control target select is not only based on the interests of consumers of services, but also based on the interests of service providers. Among the above three, to expand output of the scale of import-competing

industries, the sequence of policy options is: Control＞ import limitations≥ open

right. 【Questions】1. What are the effects to national security brought by liberalization of trade in services?2. How to express welfare analysis of policy on liberalization of trade in services? 3. What is the policy orientation of China trade in services?4. What are the contents and score included in protective policy of trade in services?5. What does China’s choice in policy of trade in services rely on?

【References】[1] Marshall Reinsdorf and Matthew J. Slaughter. International Trade in Services and Intangibles in the Era of Globalization [M]. The University of Chicago Press, 2009[2] Aaditya Mattoo, Robert M. Stern, and Gianni Zanini. A Handbook of International Trade in Services [M]. Oxford University Press, 2008

[3] 陈双喜, 魏巍, 冯琳. 国际服务贸易（第二版）[M]. 大连：东北财经大学出版社，2009

【Reading material】The Historical Evolution of Policy in ITS