Ministry: Trade in services a key priority this year [China Daily: Hong Kong Edition]
(China Daily: Hong Kong Edition Via Acquire Media NewsEdge) China pledged to step up support measures for trade in services as the world's second-largest economy tries to shift its economic growth model toward consumption and away from heavy reliance on investment and exports, senior officials said on Monday.
"The near future will be a very important period," said Zhou Liujun, director-general of the department of trade in services and commercial services at the Ministry of Commerce.
While foreign trade in goods refers to shipment of commodities, trade in services points to the export and import of intangible products, such as tourism, financial services and telecommunications services. China was the world's biggest goods trader and third-largest trader in services in 2013, with goods trade accounting for 11 percent of the world's total and that of services 6 percent of the world's total. Trade in services have outstripped goods trade in recent years.
"The economic recovery in developed economies strongly drove up China's trade in services this year. At home, services last year surpassed the manufacturing sector for the first time and accounted for the lion's share of GDP," Zhou said.
"Foreign direct investment into services sector keeps outpacing that of manufacturing. This will provide robust momentum for the country's trade in services," he added.
In the first quarter of 2014, China's services exports rose 14 percent year-on-year to $53 billion, while the country's services imports increased 16.6 percent to $85.8 billion, leaving a deficit of $32.8 billion. In the same period, combined exports and imports of services gained 15.6 percent to $138.8 billion, about 12.8 percent of the country's total trade in goods and services, according to the Ministry of Commerce.
"Expanding services exports is a key task this year, and the ministry will study the drafting of a catalog for guidance. A special fund will be set up, while new financial products will be innovated to support key projects. The release of services data also will be more timely," Zhou said.
The ministry plans to introduce a new round of support measures for services outsourcing, including an industrial plan, from 2016-2020. In addition, it will step up the building of overseas sales networks, export credit will be strengthened, and new income tax policies will soon launched, Zhou said.
Along with encouraging the exports of cultural services, China also will improve regulations on discount interest funds for technology exports as well as pilot supports for the trade of traditional Chinese medicine.
The third China (Beijing) International Fair for Trade In Services will be held from May 28 to June 1 in Beijing. Founded in 2012, the fair serves as an international platform of trade in services.
"In the near future, China will continue to expand importing of services, which is driven by economic restructuring," said Yao Jian, a spokesman for the ministry.
The scope of China's trade in services has been changing. The share of traditional services travel, transport and construction has been declining, while high-value-add services have maintained robust growth. The exports and imports of traditional services accounted for 59.4 percent of the total in the first quarter, down 3.3 percentage points from a year earlier, according to the ministry.
"China is a large goods trader, but not a well-developed one. Trade in services will play a crucial role in the process of the improvement as the share of trade in services accounted for only 12.8 percent of China's total trade in goods and services, much lower than the world's average of 20 percent," Yao said.
In the first quarter of 2014, China's goods trade fell 1 percent year-on-year while exports dropped 3.4 percent, mainly due to a large base figure inflated by rampant over-invoicing, through illicit transactions via Hong Kong, in the corresponding period last year.
(China Daily 05/06/2014 page14)
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