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China’s service imports boost global trade

Author  :  HUANG YA’NAN     Source  :    Chinese Social Sciences Today     2019-03-04

The service trade zone of the first China International Import Expo brings together hundreds of service trade exhibitors from around the world last November. Photo: Fang Zhe/XINHUA

In recent years, the contribution rate of China’s service industry to national economic growth has been increasing steadily. In 2017, the volume of China’s service imports ranked second in the world. Imports of services will not only help promote the transformation and upgrading of domestic industrial structure, but also bring new opportunities for global trade growth.

The scale of China’s service imports has expanded rapidly in recent years. According to data released by China’s Ministry of Commerce, from 1982 to 2017, China’s imports of services surged from US$2.02 billion to US$467.59 billion, an increase of more than 200 times, and its proportion in global service imports rose from 0.4 percent to 9 percent.

Wei Hao, director of the Department of International Economics and Trade at Beijing Normal University, said that China’s service imports have made a great contribution to the development, recovery and stable growth of the world economy, providing opportunities of development and survival for related enterprises and creating jobs and career development opportunities for residents in source countries of imports.

China’s service imports have promoted the liberalization of global trade in services. Dong Yan, a research fellow from the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said that China has always been a firm supporter of the liberalization of trade in services and has been actively promoting this in international dialogue and cooperation mechanisms.

China’s service imports have also explored new ways of development for global trade in services. “Since 2016, China has carried out pilot projects for innovation in trade in services in 15 regions including Tianjin and Shanghai, and it has carefully explored institutional mechanisms, policy measures and paths for openness to adapt to the innovation and development of trade in services, providing a useful reference for the development of trade in services in other developing countries,” Dong said.

In 2017, China’s imports of traditional services (transportation, travel, construction, processing services) amounted to approximately US$356.5 billion, among which travel service imports reached US$254.8 billion. Imports of new services represented by intellectual property fees, telecommunications, computer and information services and financial services totaled US$111.11 billion.

This shows that with the improvement of the living standards of Chinese people and the upgrading of consumption levels, the demand for overseas services such as tourism, consumption, education, medical treatment and other services continues to increase, Wei said. At the same time, the transformation and upgrading of the manufacturing industry has stimulated the imports of production services such as finance, insurance, R&D and design, information technology, and modern business services.

In the future, China needs to expand the imports of emerging services, especially those of high-end production services, and optimize the structure of service imports, Wei concluded.

The growth rate of imports of emerging services continues to exceed that of traditional service imports, indicating the steady advancement of China’s supplyside structural reforms and economic transformation and upgrading. Moreover, the trade in services of service firms and construction firms established in China with a foreign firm holding more than 50 percent of shares has developed rapidly. The trade in services of these firms surpasses that of the service firms and construction firms established in another country or region by a firm within the territory of China holding more than 50 percent of shares, Dong observed, in terms of service sales revenue, total profit, number of enterprises and number of employees.

China’s industrial structure transformation and upgrading requires further expansion of corresponding service imports. Feng Zongxian, a professor from the School of Economics and Finance at Xi’an Jiaotong University, suggested opening more areas in the service industry and improving the market access system of trade in services under the modes of crossborder delivery, overseas consumption and the movement of natural persons. Feng also suggested increasing imports of high-quality services such as telecommunications, computer and information services, and professional and management consulting services.

In addition, compared with that of the eastern region, the scale of service import and export in the central and western regions of China is still at a low level. As such, accelerating the development of the central and western regions is also conducive to expanding service imports, Feng concluded.

 

 

 

Editor: Yu Hui

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