China’s Service Trade Set to Unleash Huge Potential

A report from Xinhua on Sept. 19th, 2024:

[Photo/People.cn]

The 2024 China International Fair for Trade in Services (CIFTIS), the largest comprehensive exhibition on trade in services in the world, opened on Sept 12, highlighting China’s robust development and enormous potential.

As a leading player for trade in services, China has been ramping up efforts to boost the sector’s growth in a bid to fuel domestic consumption and facilitate global economic and cultural exchanges. The following are some highlights of the market’s development in the country.

China has seen impressive growth in service trade. From 2012 to 2023, the volume of service trade in China, measured in U.S. dollars, grew at an average annual growth rate of 6.2 percent. This rate surpasses the global average growth rate and the concurrent growth rate in China’s merchandise trade.

In 2023, China’s share of global service exports and service imports stood at 4.8 percent and 7.5 percent respectively, indicating huge growth potential.

From January to July of this year, China’s service trade registered double-digit growth in total trade, exports and imports. Deficit in service trade amounted to 765.18 billion yuan (107.45 billion U.S. dollars) during the period.

Travel-related service import and export, which have generally rebounded to the pre-pandemic level of 2019, made up nearly 27 percent of China’s total service trade, the largest and fastest-growing sub-sector in the field.

Meanwhile, in the field of knowledge-intensive service trade, personal culture and entertainment services saw a rapid growth.

The country’s service trade is also getting increasingly smarter and greener. Over 40 percent of the trade were capable of being delivered in digital forms in the first half (H1) of this year.

The service trade’s steady expansion is underpinned by China’s booming service sector.

In H1, the service industry’s value added increased by 4.6 percent year on year, accounting for 56.7 percent of the GDP. The service industry contributed 52.6 percent to the economic growth in the period.

To share the country’s vast market with the global service providers, the country introduced its first negative list for cross-border service trade at the Hainan Free Trade Port in 2021, specifying that domestic and overseas service providers should enjoy equal access in sectors not on this list. Thanks to the pro-trade policy, the southern Chinese island province saw its service trade volume climb 29.6 percent year on year in 2023.

China moved further down the path in March of this year. The government rolled out national and pilot free trade zone versions of negative lists for cross-border trade in services, marking the establishment of a multi-tiered opening-up system for the field across the country.

Earlier this month, the Chinese government issued a guideline to widen the opening-up of the service trade market, outlining 20 major tasks including encouraging exports of traditional Chinese medicine services and expanding imports of premium life services in fields like culture and entertainment.

China initiated a national fair dedicated to promoting trade in services in 2012, which later became known as the CIFTIS. The event has attracted over 900,000 exhibitors and participants from 197 countries and regions since its inception.

The 2024 CIFTIS saw 85 countries and international organizations participate in the exhibitions and conferences.