China will 'rise' in global services market

Subject

China's trade in services.

Significance

The 13th Five-Year Plan ratified by the National People's Congress in March sets a target of increasing the service sector's share of China's foreign trade to 16%. At the beginning of the 21st century China was a marginal player in the global market for commercial services; today it is among the top five services exporters. The government is promoting service exports and has set an ambitious 1-trillion-dollar target for 2020 -- more than four times the 2014 figure of 232.5 billion dollars. However, China's trade in services is permanently in deficit and its services imports are expanding much faster than exports. It has become the largest net importer of services in the world.

Impacts

• In the foreseeable future, China is likely to become the world's largest importer of services, overtaking the United States.
• A growing number of Chinese service companies will become household names around the world, especially in the developing countries.
• China's services trade deficit will partly offset its merchandise trade surplus, reducing overall trade imbalances with Western partners.
• Chinese import demand will grow in transportation, tourism, finance, telecommunications, consulting, legal services and education.