China to expand services exports in Asia-Pacific region

China’s trade in services is set to become a key driver of economic growth in the Asia-Pacific region and the key to attracting foreign investment, according to the country’s top economists and business leaders.

In particular, the services driving this growth include transportation, tourism, telecommunications, advertising, education, computing and accounting.

Long Guoqiang, vice-president of the State Council’s Development Research Center, said China will increasingly engage in services trade within the Asia-Pacific region through the Regional Comprehensive Economic Partnership and international cooperation.

Long was speaking at the recent China International Fair for Trade in Services, which took place in Beijing. His views were echoed by Vladimir Kazbekov, vice-president and chief operating officer of Shanghai-headquartered New Development Bank, who said China “had made notable strides in liberalizing its services sector, creating new opportunities for further advancement and attracting foreign investment”.

Wang Bo, deputy director of the department of trade in services and commercial services at the Ministry of Commerce, said the country’s policy if aligning with international standards and implementing a negative list for cross-border trade in services underscores its strong commitment to this process.

He said China has pledged to deepen its opening-up policy and welcome foreign investment in areas that were previously restricted. For example, the Ministry of Commerce announced in early September that China plans to allow wholly owned foreign hospitals in Beijing, Shanghai and seven other cities or regions.

“Recently, China opened certain areas of the culture and entertainment sectors to foreign investment. Similar policies have also been put in place in the finance sector,” said Jiang Hao, a partner at global management consultancy Roland Berger. “The country’s vast service market is clearly appealing to foreign investors, offering significant potential for foreign companies to succeed in China.”

Ulrik Knudsen, deputy secretary-general of the Organization for Economic Cooperation and Development, said services are a crucial part of the digital and physical infrastructure that underpin supply chains. Lowering barriers can boost access to foreign investment, improve interoperability and encourage diversification of suppliers.

To achieve this, Knudsen said governments must collaborate to revitalize discussions on services trade, including initiatives for liberalization through bilateral and multilateral services trade agreements.

 

Foreign trade shows steady expansion in 2024

China’s total merchandise trade hit 28.58 trillion yuan ($4.02 trillion) in the first eight months of this year, up 6% year-on-year, remaining on a steady growth trajectory, according to data released by the General Administration of Customs (GAC).

Exports totalled 16.45 trillion yuan, up 6.9%, while imports reached 12.13 trillion yuan, increasing by 4.7%, resulting in a trade surplus of 4.32 trillion yuan, expanding by 13.6% from the previous year, the GAC data showed.

In August alone, China’s total foreign trade stood at 3.75 trillion yuan, up 4.8% year-on-year. Exports reached 2.20 trillion yuan, up 8.4%, while imports were unchanged at 1.55 trillion yuan.

In US dollar terms, China’s exports in August rose by 8.7%, while imports grew by 0.5%.

The GAC said the figure of 8.7% for the August export increase rate was higher than expected, surpassing current global economic trends and China’s expected domestic GDP growth rate of 5%.

Zhou Maohua, an economist at China Everbright Bank, said that despite having to deal with increasingly complex and challenging global conditions in recent years, China’s foreign trade enterprises have displayed strong competitiveness.

He told the Global Times website that the main factor supporting China’s foreign trade is the ongoing expansion of global demand. “China’s trade structure continues to optimize, with strong performances in emerging markets such as the Association of Southeast Asian Nations (ASEAN), Belt and Road Initiative (BRI) partner countries, and Latin America,” Zhou said.

In the first eight months of this year, ASEAN remained China’s largest trading partner, with bilateral trade hitting 4.5 trillion yuan, up 10% year-on-year.

The EU was China’s second-largest trading partner, with bilateral trade totalling 3.72 trillion yuan, up 1.15 year-on-year. The US ranked as the third-largest trade partner, with total trade being recorded at 3.15 trillion yuan, up 4.4%.