Abstract Since China's access to WTO, FDI in tertiary-industry in China has dropped behind the FDI in manufacture industry in both total value and growth rate, especially before 2005. But there has been a jump in recent years. This paper examines why FDI in tertiary-industry fluctuated so greatly. We test the factors which have influence on the FDI in tertiary-industry in China by using the panel data of 27 provinces from 2001 to 2007. We find that the private degree has a significant impact on FDI in tertiary-industry. At the same time, the scale of the market is not so important for FDI in service sector. From the data we can see that although the scale of the market in our country is growing fast now, marketization process is stilling ongoing. Before 2005, the marketization is laggardly relative to the recent years. The empirical result can to some extent explain reasons for the lag of FDI in service sector from 2001 to 2005, and the boom in 2006 and 2007 in our country.
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Received: 27 January 2009
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Corresponding Authors:
Zhang Jie
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