China’s Expanding Influence in Global Services Trade
China’s Expanding Influence in Global Services Trade

China’s Expanding Influence in Global Services Trade

China has witnessed a remarkable increase in its global commercial services exports, growing from 3 percent in 2005 to 5.4 percent in 2022, as highlighted in a recent report jointly published by the World Bank Group and World Trade Organization.

The report, titled “Trade in Services for Development,” attributes the growth of commercial services trade to advancements in information and communications technologies. With the widespread expansion of the internet, various services, including professional, business, audiovisual, education, distribution, financial, and health-related services, can now be remotely provided on a global scale.

Another Asian country excelling in commercial services, India, has also witnessed significant progress, doubling its share of exports in this sector from 2 percent in 2005 to 4.4 percent in 2022.

Unlike goods trade, services trade involves the sale and delivery of intangible services such as transportation, finance, tourism, telecommunications, construction, advertising, computing, and accounting.

China’s trade in services has thrived due to its continuous opening-up, a stable recovery in the services sector, and ongoing digitalization, even amidst weakening demand for goods and geoeconomic fragmentation. The Ministry of Commerce reported a 9.1 percent year-on-year growth in the value of China’s trade in services, reaching 2.08 trillion yuan ($287.56 billion) in the first four months of the year.

Experts have observed notable activity in segments like human capital-intensive services, knowledge-intensive services, and travel services, including education, tourism, aircraft and vessel maintenance, as well as TV and film production, within China in recent years.

Zhang Wei, chief expert of the Shanghai-based China Association of Trade in Services, believes that future economic growth in China will be driven by the increasing export of human capital-intensive services, which require a higher level of expertise and skill. These services encompass areas such as technology consulting, research and development, and engineering.

China’s trade in knowledge-intensive services has also expanded, growing by 13.1 percent year-on-year to 905.79 billion yuan between January and April. This figure accounted for 43.5 percent of the country’s total volume of services trade, representing a 1.5 percentage point increase compared to the same period in 2022, as reported by the Ministry of Commerce.

Zhang further emphasizes that the expanding middle-income population in China will contribute to the national economy by driving the demand for high-quality foreign services. These services may cover domains such as education, logistics, tourism, healthcare, and entertainment.

Foreign service trade providers express optimism about the future of the industry in the Chinese market. The Regional Comprehensive Economic Partnership pact and other free trade agreements, which bring zero and low tariff rates, are expected to enhance consumers’ purchasing power and enable small and medium-sized enterprises to expand their reach to other signatory countries.

Eddy Chan, senior vice-president of United States-based FedEx Express and president of FedEx China, believes that these factors will generate substantial growth opportunities for cross-border service trade providers.

German testing, inspection, and certification group Dekra Group, with a global workforce of over 48,000 employees, plans to expand its laboratory space in Hefei, Anhui province this year. This expansion aims to cater to the rapidly growing information technology, household appliances, and electric vehicle industries in China’s eastern region.

Mike Walsh, executive vice-president of Dekra and the group’s head of the Asia-Pacific region, sees abundant opportunities arising from China’s pursuit of sustainable growth and its rapid pace of industrial upgrading.


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