China's open development of service trade expected to further accelerate

The continuous popularity of "China Travel," the successful overseas expansion of digital gaming products, and the trending of Chinese cultural IPs abroad... These hot topics reflect the rapid development of China's service trade.

Government support is partly to thank, with China's State Council recently unveiling a set of guidelines to promote the high-quality development of trade in services with high-standard opening up.

This photo taken on Sept. 12, 2024 shows a view in the China National Convention Center, a venue of the 2024 China International Fair for Trade in Services (CIFTIS), in Beijing, capital of China. (Xinhua/Ren Chao)

Experts analyzed that with the implementation of the guidelines, China's open development of trade in services is expected to further accelerate.

The guidelines aim to expand the scale, optimize the structure, improve the efficiency and enhance the strength of trade in services.

China's total import and export volume of services reached a historical high of 6.6 trillion yuan ($935.25 billion) in 2023, up 10 percent year on year. From 2012 to 2023, the volume of service trade in China, measured in U.S. dollars, grew at an average annual rate of 6.2 percent, higher than the global average growth rate and the growth rate in the country's trade in goods during the same period.

Last year, knowledge-intensive service trade grew to account for 41.4 percent of China's total service trade. In particular, exports of knowledge-intensive services increased to make up 57.5 percent of the country's total service exports, indicating a significant boost in its competitiveness and value of service exports. If this growth trend continues, experts predict that knowledge-intensive service trade will account for over 50 percent of China's total service trade in the future.

Tang Wenhong, assistant minister of commerce, said China has been steering its service trade towards high-quality development since the 18th National Congress of the Communist Party of China, resulting in steady expansion of service trade volume, continuous optimization of structure, and a significant increase in international competitiveness.

"Currently, China's service trade is embracing an important period of innovation and growth," Tang said.

Tang added that the implementation of the guidelines will help China further open up its service sector, promote convenient cross-border flow of various innovation elements, and optimize the environment for the growth of trade in services.

The scale of China's service trade grew from over $4 billion in 1982 to $933.1 billion in 2023, representing a massive increase.

Since joining the WTO in 2001, China has been fully fulfilling its commitments, accelerating the opening up of its service sector to the outside world, and successfully boosting trade in services, Tang noted.

The guidelines called for promoting institutional opening up of trade in services, fully implementing a negative list for cross-border trade in services, and establishing the management system for the negative list. This is an important move with China taking the initiative to align with high-standard international economic and trade rules.

With the full implementation of the management system for the negative list, service trade is expected to become a breakthrough point for China's further opening up, said Cui Fan, a professor with the School of International Trade and Economics at University of International Business and Economics.

The guidelines stressed promoting the cross-border flow of resources and production factors, as well as the innovative development of key areas such as international transportation, tourism, trade in professional services, exports of traditionally competitive services, and the high-quality development of cultural trade.

The Ministry of Culture and Tourism and the Ministry of Commerce launched a new batch of 12 national bases for international cultural trade in 2023, providing comprehensive services for domestic cultural and tourism enterprises to explore overseas markets and for foreign companies to invest and trade in China.

Since the beginning of this year, China has supported these bases in engaging in overseas exchange activities in countries like Vietnam and Hungary, resulting in procurement contracts worth 20 million yuan and over 40 cooperation intentions valued at over 100 million yuan.

The guidelines also called for expanding the layout of the international market and deepening international cooperation in trade in services.

Wang Dongtang, a senior official with the Ministry of Commerce, said China will continue to deepen service trade cooperation with countries along the Belt and Road and cultivate more growth points for cooperation. The country will expand multilateral, bilateral and regional cooperation mechanisms for trade in services, support the building of international cooperation parks for service trade in areas where conditions permit, and actively expand the "circle of friends" in trade in services.

"As the world's second-largest country in service trade, China's efforts to promote opening up of trade in services will inject tremendous vitality into the global market," said Chi Fulin, head of the Hainan-based China Institute for Reform and Development.