Global Service Network and the Choices of China

Global production network has become the main competitive force on the micro level in the process of globalization, which is monopolized by transnational corporations. After the transfer of manufactures from developed countries to developing countries, global transfer turns to service industry, especially the transfer of knowledge intensive services such as financial services, professional services, information services, research and development and technology. The paper constructs a framework to analyze the network and its impact on globalization and how China's knowledge intensive service industry has developed by being involved in the global service network. It draws the conclusion that by involving in global service network, which incorporates knowledge transfer mechanism, the developing countries can acquire later-comer advantage and develop their industry in some period, but the lock-in trap would be damage to their further development.