This article describes a study by co-integration test and Granger causality test on the relationships between China's services trades and employment using the data of services trade from the WTO website and the employment data from China Statistic Yearbook for the years from 1982 to 2003. Co-integration test showed that 1% increase in export value and import value of services created respectively 0.205% and 0.068 7% more job opportunities in the service sector. Both export and import of services impacted positively on employment in service industry, and export did more than import. However, in the short run, the impacts of services export and import on employment in service industry were both very small, though positive; and the impacts of employment in service industry on both export and import of services were very big, but not stable. Granger causality test indicated that employment in service industry was a Granger cause of services export. The findings highlight the importance of facilitating services import and reducing import barriers, and suggest that the competitiveness of China's labor- intensive services trade can be exploited to boost services export and help employment in service sector, and that the structure of services trade should be optimized by shifting from labor-intensive to knowledge-and technology-intensive services thus to enhance China's competitiveness of services export. This article describes a study by co-integration test and Granger causality test on the relationships between China's services trades and employment using the data of services trade from the WTO website and the employment data from China Statistic Yearbook for the years from 1982 to 2003. Co -integration test showed that 1% increase in export value and import value of services created respectively 0.205% and 0.068 7% more job opportunities in the service sector. Both export and import of services impacted positively on employment in service industry, and export did more than import. However, in the short run, the impacts of services export and import on employment in service industry were both very small, though positive; and the impacts of employment in service industry on both export and import of services were very big, but not stable. Granger causality test indicated that employment in service industry was a Granger cause of services export. The findings highlight the importance of facilitating services import and reducing import barriers, and suggest that the competitiveness of China's labor- intensive services trade can be exploited to boost services export and help employment in service sector, and that the structure of services trade be be optimized by shifting from labor-intensive to knowledge-and technology-intensive services thus to enhance China's competitiveness of services export.