Ministry of Commerce’s Advice on How to Embrace New Opportunities and Challenges for Trade in Services during 14th Five-Year Plan Period

The 2021 China International Fair for Trade in Services (CIFTIS) will be held from September 2 to 7 at the China National Convention Center and Shougang Industrial Park in Beijing. What are the current opportunities and challenges facing trade in services? What are the key initiatives to boost the development of trade in services in the 14th Five-Year Plan period? At a press conference held by the Ministry of Commerce recently, Chen Chunjiang, Director General of the Department of Trade in Services of the Ministry of Commerce, answered these questions.

(Image courtesy of Shougang Industrial Park Official WeChat account)

Chen said that China’s economy has now entered a stage of high-quality development, and trade in services has increasingly become an important driving force in building a new development paradigm and cultivating new advantages in international cooperation and competition, thus facing unprecedented opportunities for development.

1. The development of the global service industry has driven the rapid growth of trade in services. Global value chains (GVCs) are being reorganized at an accelerated pace, with service links represented by research and development, finance, logistics, marketing and branding gaining prominence in GVCs. The burgeoning cross-border investment in services has led to a boom in trade in services, contributing to its growing share of world trade.

2. The digitization of services has expanded the scope for the development of trade in services. Digital technology has promoted digital innovation on the supply side and digital consumption on the demand side, significantly increasing the tradability of services.

3. The foundation for the development of trade in services in China is becoming increasingly solid. By 2020, the service sector accounted for 54.5% of China’s GDP; the Chinese people’s growing demand for quality services is driving the expansion of the scale and quality of trade in services.

4. The advantages of China’s mega market will be further strengthened, and the integration of domestic and foreign trade will promote the synergic development of domestic and international markets. There is a great prospect for openness and cooperation in the service sector, which will play an important role in the building of a new development paradigm.

In the meantime, the development of China’s trade in services is also facing new challenges. From an international perspective, global industry chains and supply chains are facing reshaping, with a clear trend towards regionalization and localization. The impact of the COVID-19 pandemic is extensive and far-reaching, rendering uncertainty and instability in the recovery of trade in services. From a domestic perspective, the international competitiveness of some service areas needs to be enhanced; the supply of services cannot fully meet the needs of consumption upgrading and industrial transformation, and the unbalanced and insufficient development of trade in services remains a prominent issue.

In general, during the 14th Five-Year Plan period, the opportunities and challenges facing the development of trade in services are unprecedented, and the opportunities generally outweigh the challenges. We will firmly grasp the opportunities, proactively embrace the challenges, deepen reform, opening up and innovation, drive the growth of total trade in services, optimize the structure and improve the efficiency, elevate the position of “Chinese services” in the global value chain, and make positive contributions to building a new development paradigm.

We will expand opening-up of the services sector to the outside world, comprehensively intensify innovation and development of pilot projects for trade in services, further lift restrictions on market access for the services sector, establish and improve the negative list management system for cross-border trade in services, and raise the level of opening up of cross-border trade in services. We will vigorously develop digital trade, promote the digital transformation of traditional trade in services, and accelerate the digitalization and upscaling of service outsourcing. We will optimize the structure of the trade in services industry, enhance the comprehensive competitiveness of traditional trade in services, accelerate the development of new trade in services, establish export bases for special services and expand imports of quality services. We will optimize the structure of the domestic market for trade in services to form a new pattern with the eastern region leading the way and the central and northeastern regions picking up their pace of development. We will deepen international cooperation in trade in services by expanding our cooperation with countries and regions involved in the construction of the “Belt and Road”, improving the mechanism of multi-bilateral cooperation in trade in services and actively participating in the regulation of international trade in services. We will also strengthen the market players by encouraging leading enterprises in the industry to expand their businesses and supporting small and medium-sized enterprises to enter the international market and raise their international competitiveness.