Services trade to embrace vitality
Print Edition
As China’s foreign trade in goods has notched a historic high in 2020 despite COVID-19 strains, the services trade sector is also expected to embrace more vitality amid the country’s efforts to open its market wider to the rest of the world.
While data on services trade for the whole year has not yet been released, its performance in the first 11 months has demonstrated prospects of growing business opportunities for both domestic and global players.
According to the World Trade Organization, in contrast to merchandise trade, trade in services refers to the sale and delivery of intangible products such as transportation, tourism, telecommunications, advertising, computing and accounting, among others.
Excluding tourism services, which suffered a heavy blow due to the pandemic, China’s services trade rose 2.2 percent year on year in the January-November period, Ministry of Commerce data showed.
During the period, services trade reached 4.08 trillion yuan (US$631 billion), with 44.2 percent being generated by trade in knowledge-intensive services, which was up 8 percent year on year.
Exports and imports of knowledge-intensive services climbed 7.6 percent and 8.4 percent, respectively, injecting much-needed impetus into the global trade market which is still in a recession.
Against the backdrop of a slump in traditional services trade like tourism, the faster expansion of trade in knowledge-intensive services took place thanks to various measures China has adopted to boost the opening-up of the sector, said Li Jun, a researcher with the MOC-affiliated Chinese Academy of International Trade and Economic Cooperation.
Moreover, with a shrinking deficit, the structure of services trade was also further optimized. In the reporting period, China’s deficit in services trade fell 51.3 percent from a year ago, the data showed.
Although restrictions were in place due to virus containment measures, the China International Fair for Trade in Services was held in Beijing in September. As the first major international economic and trade event since the COVID-19 outbreak, it attracted about 22,000 firms and institutions from 148 countries and regions, including 199 Fortune 500 companies.
During the fair, authorities announced that the country will develop open platforms for the pilot program of innovative development of the services sector, further ease market access for the sector, and take greater initiatives to increase imports of quality services.
The measures came as China has consistently pushed forward the opening-up of more service fields and improved the business environment.
The foreign investment law took effect on the first day of 2020, a landmark move that ensures foreign investors get equal access to opportunities in China by regulations including a system of pre-establishment national treatment plus a negative list.
In June, China yet again shortened the negative list for foreign investment, slashing the number of sectors that are off-limits to foreign investors to 33, down from 40 in the 2019 version.
For the opening-up of the financial sector, for instance, foreign ownership caps on securities firms were scrapped and the business scope of foreign-funded banks was further widened. In the telecommunications sector, more value-added businesses will be open for foreign investors.
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