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Seize the Opportunity of Rapid Development of Global Trade in Services

Submit Time:04-07-2017 | Zoom In | Zoom Out

Author:Chi Fulin | Source:People's Daily

Abstract:

  Under the new umbrella of economic globalization, the new trend of international trade focusing on trade in services is taking shape, injecting a new impetus to economic globalization. China should seize the opportunity to accelerate the development of trade in services and achieve the goal of a great trade power in time, while consolidating its status as a goods trade power.

  In recent years, global trade in services has grown rapidly and played a more prominent role in promoting the process of global free trade. This is mainly reflected in three aspects. First, the growth of trade in services has become an important engine of global trade growth. From 2005 to 2015, the average annual growth rate of global trade in services was faster than that of global trade in goods by 1.5 percentage points, and 30% of the trade in goods was driven by trade in services. Second, the scale and proportion of trade in services are increasing faster. Trade in services accounted for 23% of global trade in 2015. If statistics is based on the added value, trade in services now accounts for about 50% of global trade. Third, the development potential of trade in services is huge. As opposed to the fact that service economy accounted for 70% of the global economic aggregate, the proportion of trade in services in the global trade was significantly low, and there is a huge room for improvement. Especially, the accelerated process of service-oriented economy in emerging economies will further release the potential for growth of trade in services.

  Trade in services has become the focus for promoting the process of global free trade, and the focus of global trade and investment rules is shifting faster from the trade in goods to the trade in services. It can be said that the level of liberalization and facilitation of trade in services will influence and determine the process and landscape of global and regional free trade to a greater extent. Trade in services has become an important part of bilateral and multilateral trade and investment agreement negotiations, and its weight is getting heavier. For example, no matter multilateral free trade agreement negotiations such as the Regional Comprehensive Economic Partnership (RCEP) and the China–Japan-South Korea Free Trade Agreement, or bilateral investment agreement negotiations such as the China–US Bilateral Investment Treaty and the China–EU Bilateral Investment Treaty, involve a considerable part related to trade in services. For another example, the core issue of some trade and investment agreement negotiations is the market access of the service industry, and the difficulty of these negotiations also lies in the same. It can be seen that the global free trade process is increasingly dependent on trade in services. The focus of free trade is increasingly shifting to the regulation, non-tariff barrier and market opening of service trade and investment. The level of market opening in the service sector has a direct impact on global investment and the associated bilateral and multilateral free trade processes. Trade in services has a growing impact on the formation of new global trade and investment rules.

  China is not only a great power of trade in goods, but also a major power of trade in services, and has become an important driving force for the development of global trade in services. From 2010 to 2015, China's total imports and exports of services achieved an average annual growth rate of more than 15%. Moreover, China's service trade has great growth potential. The release of the potential will not only enhance China's economic development level and quality, but also promote a new round of economic globalization process. At present, huge demands for trade in services lies behind China's economic transformation and upgrading. No matter consumption structure upgrading or industrial structure upgrading has growing demands for trade in services. Conservative estimates show that by 2020, China's total trade in services will reach at least more than 1 trillion US dollars, accounting for about 10% of global trade in services; by 2030, China will become the world's largest importer of services. The rapid development of China's trade in services will add a huge boost to the process of global free trade.

  It should also be recognized that although China is a major power of trade in services, it is not a strong power of trade in services. Despite that China's trade in services has grown rapidly, the level of development is not high enough, the overall competitiveness of service exports is not strong enough, and the service trade deficit is still relatively large. The weak spot of China's opening up lies in the service industry, while the weak spot of foreign trade consists in the service trade. In the face of the opportunities brought about by rapid development of global trade in services, we should seize such opportunities to vigorously promote the transformation of opening up with focus on trade in services. We should expand the opening-up in the service industry as the focus of a new round of opening to the outside world, and learn from the international advanced experience to improve the level of development of the service industry and vigorously develop trade in services. We should also take the development of trade in services as a key area for the "Belt and Road" construction and build a multi-level, multi-form network of free trade areas. It is necessary to speed up the transformation of domestic free trade areas with emphasis put on trade in services, and allow the free trade areas to play an important pilot role in developing trade in services and opening the service market. It is also important to improve policies regarding tourism, health, culture, vocational education and other services, and build the service trade into a new engine for economic transformation and upgrading.

                                            (Author: President of China Institute for Reform and Development)


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