Trade in service drives new growth in China

In 2016, Chinese MOFCOM comprehensively implemented the spirits of the 18th CPC National Congress, the third, fourth, fifth and sixth Plenary Sessions of the 18th CPC Central Committee, made in-depth study and carried out the speech spirits of General-Secretary Xi Jinping. In accordance with the uniform deployment of the central committee and the State Council, the Ministry of Commerce actively adapted to the new normal of economic development, insisted on steady progress, undertook to promote supply-side structural reform and innovative development of trade in service, making a good start for the 13th Five-Year Plan.

Trade in service maintained rapid growth. Firstly, the size sustained a rapid growth and its percentage among foreign trade steadily rose. In January-October 2016, China’s total service imports and exports amounted to RMB4.2915 trillion (the same currency below), up 16% year on year. Among these, service exports amounted to RMB1.4625 trillion, up 3.6% year on year; service imports stood at RMB2.829 trillion, up 23.7% year on year. The percentage that trade in service took among foreign trade continued to rise and reached 18% in January-October, with 2.6 percentage points higher than that in 2015. Secondly, exports of some high added-value service grew rapidly. High added-value service exports represented by technical service, maintenance and repair service, and advertising service stood out. Among these, exports of technical service, maintenance and repair service, and advertising service registered RMB61.6 billion, RMB27.7 billion and RMB25.5 billion respectively, going up 14%, 67.5% and 63.4% year on year respectively. Thirdly, service imports grew fast with trade deficit being increased. China’s service imports amounted to RMB2.829 trillion with a growth rate of 23.7%. Among these, travel imports (including tourism and study overseas) reached RMB1.8619 trillion, up 30.6% year on year, becoming the major factor to lead service imports. Affected by that, China’s deficit of trade in service in January-October reached RMB1.3664 trillion. Fourthly, the size of offshore service outsourcing ranked the second in the world. In January-November 2016, the contract value of service outsourcing signed by Chinese enterprises was RMB836.09 billion and the executed contract value reached RMB602.49 billion, up 17.5% and 17.3% respectively. Among these, the contract value of offshore service outsourcing hit RMB552.7 billion and the executed contract value was RMB392.55 billion, up 17.1% and 15.2% respectively.

Major reform tasks were fully implemented and innovative development of trade in service stepped into a new stage. First, pilots for innovative development of trade in service were all launched, implemented and tried. On February 22, 2016, the State Council approved to conduct pilots for innovative development of trade in service in 15 provinces and cities (region) including Tianjin for two years. MOFCOM guided pilot regions to compile Pilots Plan, promote facilitation and liberalization of trade in service, undertake to build legal, international and convenient business environment and create a new height for system innovation of trade in service. Second, range-extension of service outsourcing demonstration cities has been completed to lead development. Notification on Adding China Service Outsourcing Demonstration Cities was printed and distributed to the ten newly added cities such as Shenyang, with the number of demonstration cities rising to 31 from 21, leading market resources to gather in demonstration cities.

Supportive policies have been constantly implemented and trade in service has driven new growth. We have carried out The State Council’s Opinions on Accelerating the Development of Trade in Service, studied to formulate The 13th Five-Year Plan for Trade in Service Development, and The Guideline Catalogue of Major Areas for Service Export, coordinated to release new policies in five aspects of treasury, taxation, finance, fund and facilitation . We promoted and popularized preferential policy of enterprises income tax for enterprises with advanced technology in 15 innovative development pilots of trade in service. We also popularized the bonded supervision facilitation policies for imported goods in international service outsourcing in 15 pilot regions and 10 newly-added service outsourcing demonstration cities.

Cooperation with major countries and regions has been deepened and new achievements have been made in expanding international market. We continued to consolidate dialogue with the US in trade in service and participate in the 3rd meeting of China-Singapore Trade in Service Cooperation Promotion Working Group. The Minutes of the 2nd Meeting of China-India Trade in Service Promotion Working Group and MOU on Trade in Service between China and Brazil were signed. So far, we have made trade in service with over 200 countries and regions and established cooperation promotion mechanism of trade in service with Australia, Brazil, Finland, Germany, India, Ireland, Singapore, and UK.

Statistics platform construction was accelerated and industry monitoring and supervision realized new functions. “International Trade in Service Supervision Service Platform” was promoted to be established. We have worked with the National Bureau of Statistics to revise The International Trade in Service Statistics Monitoring System to accelerate business integration of trade in service, gradually realize the five functions of business procedure record, statistics monitoring analysis, policy support guarantee, supervision onwards and afterwards and comprehensive credit assessment.

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