People watch an auto-pilot car during the 2019 China International Fair for Trade in Services (CIFTIS) in Beijing on May 28, 2019. [Photo/Xinhua]
Themed "Opening-up, Innovation, Intelligence and Integration," the 6th China International Fair for Trade in Services (CIFTIS) was held in Beijing from May 28 to June 1. The fair aims to encourage exchanges in financial, communication, cultural, and legal services by providing a solid trading platform for its participants, thereby boosting the high-quality growth of the Chinese economy and high-level partnerships in international service trade. Almost 130 countries and regions, including 98 Belt and Road nations participated in this mega event.
In the wake of increasing globalization in international economic and trade cooperation, service trade is becoming increasingly important. In recent years, China has shown its intent of further opening-up along with bolstering the multilateral trading system, widening foreign market access, and vigorously building a conducive business environment. The country will continue to forge new partnerships and deepen trade and investment with other countries in an open, balanced and mutually beneficial manner. Countries should grab the opportunities brought about by the CIFTIS to build a vivid future of global services with mutual benefit.
Currently, China has established the service trading partnership with more than 200 nations worldwide, with total volume amounting to almost 1.29 trillion yuan (about 186.81 billion US dollars), up 2.6% year-on-year, out of which, the service export volume exceeded 463.49 billion yuan in the first quarter of this year. Notably, China has been the world's second largest country in terms of service trade for the past five years successively, with the total volume hitting 5.24 trillion yuan (759 billion US dollars) in 2018, up 11.5% year-on-year. In 2018 alone, China's service export witnessed double-digit growth in transport, insurance, intellectual property royalties and other businesses of the service sector. Similarly, the service trade's share in its overall foreign trade also swelled by 3.6% between 2012 and 2018, growing from 11.1% to 14.7%, according to data from the Ministry of Commerce. This trend indicates a steady expansion of the country's service trade.
In March last year, during the annual session of the China Development Forum, China's Vice Minister of Commerce Wang Shouwen indicated that the country would provide broader market access to foreign investors in finance, telecom, healthcare, education, and old-age care, and would relax control on foreign holdings in financial businesses such as banks, brokerages and funds.
In line with this commitment of further opening-up and providing broader market access to foreign firms, Beijing recently initiated a pilot service program mainly focused on sectors like finance, telecommunications, education and other service industries. So far, 220 pilot tasks and 21 opening-up measures have been launched under this program, and as a result, the deployment of foreign capital reached 23 billion dollars in the city in 2017.
Also, the value contributed by the service sector accounted for 81% of the GDP in 2018, thus making the service sector a strong economic driver of the country. Additionally, in March this year, the country also intensified its plan to open its financial sector to foreign investors, under which the minimum threshold for banks and insurance companies were significantly relaxed.
These measures would not just facilitate the country in achieving its GDP growth target of 6-6.5% for 2019, but would also act as an aid in counterbalancing the repercussions of the trade spat on the economy. As per Zhu Min, a former deputy managing director at the IMF, "eliminating bad outcomes from trade tensions, further opening-up in China's services sector, together with high-tech development supported by artificial intelligence, will help lift Chinese economic growth from 6.3% to around 7% by 2035."
Recently, the World Trade Organization (WTO) reduced its projection for global trade growth this year from 3.7% to 2.6%, as a result of growing concern over trade friction. Therefore, continuing reforms in the service trade sector would not just facilitate the inflow of higher levels of global investment into the country, but also support the global economy in reaching a more reasonable level. It is worth noting that China, since its entry in the WTO almost two decades ago, has opened almost 120 service-related industries, surpassing the target of 100 industries for foreign investors. In addition, the Chinese government has entirely liberalized many sectors such as credit ratings, accounting, e-commerce, power batteries and railway traffic equipment in the country's Free Trade Zones. Moreover, the country has been shrinking its negative list for foreign businesses operating in these areas and plans to further extend this concept nationwide in the future.
Moving forward, as China shifts from its old export-based growth model, the service industry acts as a major driver to propel the economy forward, thereby creating the requirement of more comprehensive service trading platforms such as CIFTIS. This is significant especially for facilitating important factors such as national politics and economics, diplomacy and foreign trade, and the expansion of reforms in achieving the high-quality growth of the country's service industry and trade in services. In addition to this, it could also further boost the regional integration and cooperation for trade in services worldwide, thus bringing vitality to the slowing global economy.
Rachana Gupta is an active blogger, poet and freenlance content writer.
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