By Wang Wenzheng, China’s services trade saw rapid growth in the first half of 2024, according to the recently released official data.
The country’s services trade totaled nearly 3.6 trillion yuan ($504.61 billion) between January and June, up 14 percent year on year. Trade in knowledge-intensive services showed sound growth momentum, and trade in travel-related services skyrocketed.
China’s services trade is moving toward innovative and intelligent development while maintaining steady progress in opening up.
China’s travel-related services have seen stronger vitality. For instance, in the first six months of this year, Beijing hosted 965 large-scale events, including performances, sports events, and exhibitions. The number of visa-free inbound tourists entering China via Beijing ports has increased tenfold compared to the same period last year.
“It has been seven years since I first came to China, and I am back here for the second time. China is friendly and open to foreign tourists,” said Pierre, a Canadian tourist who just explored Gulou Street in Beijing.
During his stay in Beijing, Pierre found the WeChat official account of Beijing Service very helpful. Foreigners in Beijing can access a wide range of online services on the platform, such as visa application, residence permit application, and accommodation registration, Pierre explained.
In the first half of this year, China’s trade in travel-related services surged 47.7 percent to surpass 961.7 billion yuan, becoming a key pillar of the country’s services trade.
Since the end of 2023, China has further opened up its tourism sector to other countries and regions. It has successively implemented visa-free policies for countries such as France, Germany, and Italy. Countries such as Antigua and Barbuda, Singapore and Thailand have signed mutual visa-free agreements with China respectively.
Additionally, China has expanded the 72/144-hour visa-free transit policy to over 50 countries. The visa-free “circle of friends” continued to expand, providing greater convenience for foreign nationals visiting China.
China’s trade in services is marching toward a higher level. The country has further opened up its services sector, implemented a negative list for cross-border trade in services at the national level, promoted the opening up of related businesses in the fields of telecommunications, internet, education, culture, and medical care in an orderly manner, and worked to accelerate the development of offshore trade.
For instance, the China (Guangdong) Pilot Free Trade Zone (FTZ) has adopted a pilot FTZ version of negative lists for cross-border trade in services. To facilitate services trade liberalization in Guangdong, Hong Kong and Macao, the pilot FTZ has further expanded the opening up of its services sector to Hong Kong and Macao, including financial, legal, accounting, engineering, tourism, and testing and certification services.
It has also promoted the establishment of the first bank, security and fund institutions wholly owned or controlled by Hong Kong and Macao capital in China. A range of innovative measures such as cross-border payment, cross-border wealth management, cross-border insurance, and cross-border mortgage have also been implemented within Guangdong, Hong Kong and Macao.
China’s trade in knowledge-intensive services has experienced rapid growth. In the first half of this year, the country’s trade in knowledge-intensive services rose 3.7 percent to more than 1.4 trillion yuan. In particular, the exports of such services stood at 802.12 billion yuan, up 2.1 percent. Besides, there was a notable increase in services such as intellectual property usage fees, and personal cultural and entertainment services.
Service outsourcing also made up an important part of China’s services trade. According to data from China’s Ministry of Commerce, in the first half of this year, Chinese firms inked services outsourcing contracts worth a total of $178.1 billion, and the executed contract value exceeded $120.9 billion, a year-on-year growth of 10.8 percent and 10.5 percent respectively.
Besides, information technology R&D services, design services, and maintenance services also experienced rapid growth, with the executed contract value increasing by 19.2 percent, 22.9 percent, and 19.4 percent respectively compared with the same period last year.
As a knowledge-intensive high-end services sector, service outsourcing covers multiple fields and requires a large number of versatile talents proficient in technology, foreign languages, marketing, and management.
To cultivate such talents, 15 vocational colleges in Yichang, central China’s Hubei province, have set up 151 majors related to service outsourcing and admitted 38,000 students. The city has also launched a smart service platform for industry-education integration, attracting more than 50 service outsourcing companies. As of June this year, nearly 150,000 professionals were employed in Yichang’s service outsourcing industry, with 56.6 percent holding a university degree or above.
China is the world’s largest trading nation in goods. According to industry experts, the integration of trade in goods and services in China will result in a stronger combined impact. The Regional Comprehensive Economic Partnership (RCEP), which has been in effect for over a year, will also create more opportunities for China’s services trade.
“The services sector has become a major driver for world economic growth,” said a spokesperson with China’s Ministry of Commerce.
The rapid advancements in digital technology and the deepening of digital transformation across different fields will further unleash the potential of cross-border trade in services, becoming an important engine for global trade growth, the spokesperson noted.
China is one of the leading countries in the world in terms of services trade volume and has enormous market potential. It aims to further improve the structure of services trade, promote the exports of knowledge-intensive services and traditional Chinese medicine, and increase the imports of R&D, design, energy conservation, carbon reduction, environment, and healthcare services.
