context: The PRC has a trade deficit of C¥663 bn in services but a much larger surplus in goods (some C¥3.1 tn). Services were highlighted in the Third Plenum Resolution, and the State Council executive meeting recently passed an Opinion promoting the high-level opening of services trade. According to the Ministry of Commerce, opening up would first focus on sectors with large demand but insufficient supply, and then expand gradually to other areas. Seeing the sector as an economic driver and an important source of know-how in advanced sectors, more efforts to bolster services trade can be expected.
In Yicai, Zhou Nianli 周念利 University of International Business and Economics WTO Research Institute researcher shares insights on the PRC services trade
- there is still much room for development and opening-up
- services trade only accounts for some 14.53 percent of total trade in services and goods in 2024 H1
- this is compared to the 56.7 percent share of value-added of the services sector in the PRC GDP
- the services sector's share in GDP should be in line with its share in trade
- services trade only accounts for some 14.53 percent of total trade in services and goods in 2024 H1
- the opening up of PRC manufacturing can be a good example for services
- the manufacturing sector has reached a fairly high level, thus the focus of liberalisation will shift to services
- the opening up of manufacturing focused on taking down trade barriers and removing special management measures in foreign investment market access
- focus areas of services trade opening-up
- likely focused on cross-border trade, consumption abroad and movement of natural persons
- the PRC has already made much progress in opening up 'commercial presence', the type of services trade that is based on foreign direct investment
- this is also the first area to be liberalised in opening up PRC services trade
- there are still some 71 special administrative measures on the negative list for cross-border trade in services
- the PRC has already made much progress in opening up 'commercial presence', the type of services trade that is based on foreign direct investment
- in industry sectors
- the upcoming focus will likely be on
- telecommunications (communication services)
- finance
- medical (health and social services)
- education
- the upcoming focus will likely be on
- likely focused on cross-border trade, consumption abroad and movement of natural persons
- difficulties in opening up
- the diverse and nuanced nature of services trade makes it difficult to find uniform standards and key points to measure the degree of liberalisation between industries
- opening up services trade involves addressing some non-tariff regulatory barriers
- which are more subtle and difficult to detect and remove
- cross-border services trade involves the orderly, effective and secure management of cross-border data flows, which is a challenge for the PRC