China increases service imports to share opportunities with the world
Date: 2020-11-20
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According to the report on China’s service imports in 2020 released by the Ministry of Commerce at the third China International Import Expo, China’s service imports since the 18th CPC National Congress totaled USD 3.4 trillion. China has become the most important source of growth in global service imports. China’s increase of service imports is driven by its domestic need of consumption upgrading and the supply-side structural reform. By better resource allocation around the world and importing high-quality factors of production from other countries, China aims to create an efficient supply system, better coordinate production, distribution, flow, and consumption, achieve long-term dynamic equilibrium between demand and supply, and promote both domestic and international circulations. Service imports help satisfy the Chinese people’s increasingly diverse consumption demand and facilitate high-quality economic development. Meanwhile, China shares its opportunities with the world by opening its services sector.        

Import of high-quality consumer services is necessary to improve people’s lives and provide them with more intellectual and cultural activities. Since the 18th CPC National Congress, the number of outbound tourists has been increasing at an annual growth rate of 10.4%, the import of travel services has risen by 16.7%, the number of students studying overseas by 8.7%, and the import of personal cultural and entertainment services by 33.7%. These figures demonstrate that the import of high-quality consumer services help meet the people’s desire for a better life.  

It is important to import digital services to boost high-quality economic development. Amid the global rising trend of digital, Internet-based and smart services, the world is seeing new ideas, new technologies and new models. Import of services has become an important way for China to draw on the achievements of human civilization. In the producer services sector, digital services such as R&D, management consulting, finance and insurance, information technology, intellectual property and so on are technology intensive and create high value-added, which can improve the total factor productivity and facilitate the growth of the services sector and even the whole economy. China’s import of digital services since the 18th CPC National Congress has totaled USD 834.51 billion. The import of digital services has created a technological spillover effect and promoted progress of homegrown technologies, enabling Chinese companies to improve their position in global industry and supply chains and international competitions.   

According to the Fifth Plenary Session of the 19th CPC Central Committee, China will foster a new development paradigm with domestic market as the mainstay and domestic and international circulations reinforcing each other. China is not pursuing a closed-door domestic circulation, but more open domestic and international circulations. It is not only to meet China’s own development needs, but also to benefit people in all countries.

China’s service imports have brought real benefits to its trade partners. Since 2015, China has imported services of over USD 420 billion from the US, and over USD 100 billion from Japan, Australia, Canada, the UK and Germany. China’s service imports create more than 18 million jobs per year for its trade partners. It is expected that China’s service imports will reach USD2.5 trillion in five years. In view of the rising unilateralism and protectionism, service providers across the world need stable export orders more than ever. China’s increase in service imports demonstrates its sense of responsibility as a major country and helps maintain stability of global industry chains and supply chains.      

China’s service imports have made a significant contribution to global economic recovery. In the five years after the global financial crisis in 2008, the world economy recovered amid setbacks, and the trade in services saw sluggish recovery. China’s contribution to the growth of global service imports reached 21.5%, exceeding the combined contribution rates of the US, Japan, and the European Union (28 countries). After the COVID-19 pandemic broke out, traditional services such as travel and transport services are severely hit, but online exhibitions, remote health care, online education, sharing platforms, cooperative office, cross-border e-commerce and so on have been growing faster. China’s import of digital services, including telecommunication, computer and information services, is one of the few highlights in global trade in the pandemic. In the first three quarters this year, China’s import of digital services from its trade partners grew significantly by 16.1% year on year to USD 114.33 billion, boosting the world economy in trying times.         

Looking ahead, as China continues to expand its opening-up, the country will explore more efficient ways to connect domestic and international markets and share factors of production and resources, which will turn the Chinese market into a market for the world, a market shared by all, and a market accessible to all. That will in turn boost the import of high-quality services.