However, with the rapid progress of information technology, transportation and globalization, many services became tradable. People began to say that “the world is flat”. The opening-up of the service industry in China followed a similar pattern of the manufacturing industry: opening-up brought in competition, boosted efficiency and quality of service, and facilitated domestic policy reform.
In the industrial field, the market competition rules are not applicable to a very small number of industries such as defense industry, but most industries can open up and bring in competition. In the service sector, there are also sensitive industries, and some services can’t be delivered across the border. Thus, the market mechanism cannot cover all of them.