ABSTRACT
This chapter is based on annual time series data over the period 2003-2011 in China, and analyses the influence of trade in services outwards foreign direct investment (OFDI) to China's domestic industry structure optimization by the application of the grey relational analysis (GRA) model. It then reviews the existing literature on the relationship of trade in services OFDI and industrial structure optimization. Most work empirically adopted the econometric analysis methods on industrial structure on the basis of total amounts of OFDI. The chapter takes the industrial structure optimization indicator system by Yang, 2006 as the objective series. The wholesale and retail services OFDI is conducive to China enterprises acquiring a better understanding of market conditions and the international advanced concepts on sales and design of products in the host country, which better push domestic products to strengthen the connection to international advanced techniques, and greatly push forward the adjustment and upgrading of the domestic industrial structure.
