Abstract
Development of service industry and service trade plays an important role in the transition of economic structure of our country. Based on the CEPA, this paper uses service trade data of Hong Kong and its five principal trade partners with 48 sub-industries between the year of 1998 and 2013 to carry out descriptive statistical research and difference-in-difference empirical analysis about the service trade export from Hong Kong to Mainland China after implementing CEPA. Research results show: firstly, CEPA greatly promotes the level of service trade between Mainland China and Hong Kong and the amount of service trade exports from Hong Kong to Mainland China averagely increases by 10.7 - 10.8 billion Hong Kong dollars; secondly, the service trade from Hong Kong to Mainland China presents structural imbalance, and traditional service industries like tourism and transportation have prominent promotion while modern service industries like finance and commerce have little promotion. Aiming at these conclusions mentioned above, this paper puts forward some suggestions in the aspect of magnifying the effect of CEPA, adjusting service trade structure and further putting the policies of CEPA into practice.
Highlights
Arrangement about Establishing Closer Economic and Trade Relations between Mainland China and Hong Kong was officially implemented on January 1st, 2004 and many supplementary agreements were signed
In the aspect of control variable, CEPA has made promises to merchandise trade in goods, service trade and investment facilitation at the same time, so in order to control the possible impact of other two aspects on results, we introduce five control variables: outward foreign direct investment of Hong Kong (S_OutDI), inward direct investment of Hong Kong (S_InDI), import (S_JK), export products of Hong Kong (S_HCK) and carrying trade (S_ZK)
Adopting the data of service trades of 48 sub-industries between Hong Kong and its 5 major trading partners from 1998 to 2013, this paper has concluded through descriptive statistical analysis that: service trade output from Hong Kong to Mainland China has been greatly improved after the implementation of CEPA
Summary
Arrangement about Establishing Closer Economic and Trade Relations between Mainland China and Hong Kong (hereinafter referred as CEPA) was officially implemented on January 1st, 2004 and many supplementary agreements were signed. Because in the aspect of service trade, there exists a great gap in competitive power between Mainland China and Hong Kong and the liberalization of service trade between the two parties will exist huge trade creation effect. Both Mainland China and Hong Kong face the problem of economic transition, and the implementation of CEPA benefits the development of service trade of the two parties and promotion of industrial restructuring. Measuring service trade creation effect between Hong Kong and Mainland China is the focus of this paper
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