Served-in-China to gradually overtake made-in-China amid economic transition

There are great opportunities in store for China's services sector and the trade in services as the country facilitates its policy environment amid economic reforms, senior officials said on Tuesday.

"China is now in a critical period for building up a well-off society, and the services sector as well as trade in services are facing historic opportunities and broad prospects," Vice-Minister of Commerce Jiang Zengwei said at the opening ceremony of the second China International Fair of Trade in Services, or CIFTIS.

The exclusive fair for trade in services, which is held in Beijing from May 28 to June 1 and features the theme of "Trade in Services: A New Engine for Value Enhancement", is a major move for the Chinese government to promote the services economy and trade in services.

"The effective boosting of the services economy has become China's inevitable choice for transforming its economic growth model, breaking up the constraints from resources and environment as well as improving people's livelihoods," Jiang said.

The added value of China's services sector in the first quarter of this year gained 8.3 percent from a year earlier to 5.69 trillion yuan ($930 billion), accounting for 47.8 percent of China's GDP in the same period. The ratio is up 1.6 percentage points from the previous year, according to the National Development and Reform Commission, China's top economic policymaker.

Non-financial foreign direct investment into China's services sector went down 2.6 percent year-on-year to $53.84 billion in 2012, but it surpassed that of manufacturing and became the sector that used the largest amount of FDI for two successive years, according to the Ministry of Commerce.

"China's opening-up is now in a new phase and boosting the services sector is an important part for China to build up a new competitive edge for its open economy, and also a major way for the country to further its participation in international economic cooperation," Jiang said in his keynote speech at the Beijing Summit of the Global Services Forum. The forum was held from Tuesday to Wednesday and aimed to enhance investment, trade and employment in the services sector.

"China's economic expansion and improved opening-up level set down the foundation and indicate a new era of the development of the services sector and trade in services. We will further open up the services sector and create a favorable policy environment for trade in services," he said.

The world's economy is undergoing a deep level of restructuring amid a slow recovery while industrial transfer, featuring the cross-border transferring of the services sector and recombination of production factors, is now speeding up across the world in a new round of technology changes and industrial innovation, Jiang said.

Supachai Panitchpakdi, secretary-general of the United Nations Conference on Trade and Development, or UNCTAD, said at the event: "We need to increase the contribution of the services sector to China's GDP growth, which will not only benefit China's economic growth, but also promote global trade."

He added that the services sector contributes more than two-thirds of world GDP growth while boosting the development of other industries and improving the services function of societies.

Mahbub Ahmed, permanent secretary of the Ministry of Commerce of Bangladesh, said: "China will keep fast growing, and the services sector is very bright."

He called for improvement of trade relations between developed and developing countries as well as more support and facilitates for less developed countries.

Mina Mashayekhi, head of the Trade Negotiations and Commercial Diplomacy Branch at the UNCTAD's Division on International Trade in Goods and Services, and Commodities, said that China has "an extremely important role in global services development and trade in services".

"China is now No 1 in exports of manufactured goods and will soon be No 1 in services production, especially in new technology-related services such as the IT sector and also in education, transportation and professional services," she said.

The first quarter of this year saw China's overall trade in services rise 14.4 percent from a year earlier to $120.1 billion with exports rising 7 percent year-on-year to $46.5 billion and imports jumping 19.7 percent to $73.6 billion, yielding a trade deficit of $7.1 billion, according to the Ministry of Commerce.

Tourism, transportation services and trade in consultations accounted for more than 70 percent of China's trade in services in the January-March period.