The Rise of the BRICS and its Development of the Service Trade

This paper compares the comparative advantages and trade patterns in the evolution of the service trade in BRICS in terms of international market share, Lafay index, and other indicators, revealing a pattern of these five countries competing in various service areas. The results reveal that the scale of the service trade in the BRICS countries has continuously expanded. Except for individual cases, the trade structures of the five BRICS countries give priority to, and have comparative advantages in terms of, the general labor force and natural resource intensive sector, while having comparative disadvantages in terms of capital and a technically crowded modern service sectors. The results of Lafay index analysis further indicate that at its present stage, the BRICS service trade as a whole can be still characterized as mainly inter-industry, although a trend of intra-industry trade appears to be gradually emerging. This paper also proposes factors influencing BRICS' competitiveness in trade in services with Michael Porter's "diamond model" and then conducts a comparative analysis of the effect of these factors on the development of the five countries. According to the results, lack of advanced factors of production, underpowered domestic market demand, low market openness, and imbalanced goods and services trades synergies are the main causes of the weak competitiveness of the BRICS' service trade. Accordingly, possible solutions are provided, including enhancing the accumulation of advanced factors of production, expanding domestic market demand, improving market openness, and promoting good and service trade synergies.通巻第37