Beijing Fair Highlights Trade in Service

Trade in services is expected to play a big- ger role as the growth engine of a cooling Chinese economy, which aims to shake off its reliance on investment and export of manufacturing products in order to have green and sustainable growth. At the same time, service trade could to some extent make up for the decline in product trade as a result of the sluggish global demand.

“With an increasing risk of another global downturn, countries are looking for a new growth pole, and the service trade has drawn much attention,” Qiu Hong, China’s Assistant Commerce Minister, said at a news conference for the First China International Fair for Trade in Services, or Beijing Fair, held in Beijing from May 28 to June 1.

“China’s domestic market for service providers still has huge potential, even amid global uncertainties, and development of the service sector is the new opportunity for the Chinese economy,”Qiu added. She was confident in the country achieving its goal to boost the service trade by 11 percent this year - the sector’s average growth rate over the past five years.

China ranks fourth globally with a service trade volume of USD419.4 billion in 2011, and the country has been climbing up the table by one notch every year in recent years.

“The key issue for manufacturers used to be how to produce your product, but now, as demand shrinks, it has come to the question of how to promote your product,” said Cheng Hong, deputy mayor of Beijing, who also spoke at the conference.

“Products will need more support from service providers such as in marketing, branding and packaging, so as to fetch a better price,” Cheng said, explaining that these factors will support sustainable demand for service trade.

The service sector still accounts for a relatively small part of China’s total economic output, only 43 percent in 2011, compared with an average of 70 percent in developed economies, as reported by the World Bank.

Domestically, there are also large regional disparities. The service sector accounts for 70 percent of the economy in Beijing, but only 20 to 30 percent in coastal areas.

Beijing Fair is the world’s first trade fair to cover all 12 categories of services defined in the General Agreement on Trade in Services, said Zhou Liujun, Director of the Service Trade Department at the Ministry of Commerce (MOFCOM). The event was jointly organized by the Ministry of Commerce and the Beijing municipal government. Ten high-level forums were held for the five-day event, with subjects ranging from cultural trade and business tourism in China to Sino-African trade in services and investment, as well as the WTO and China. Besides, ninety events were held on 27 topics in the 12 service sectors classified by the WTO. Seven countries ― Australia, Israel, Japan, Singapore, the Republic of Korea, Uruguay, the UK, as well as Africa had theme days to showcase their service brands. Provinces and cities that have rapidly developing service industries such as Jiangsu, Zhejiang, Beijing, Tianjin and Shanghai, as well as some state-owned enterprises, also held theme day events. The fair is a biennial event first held in 2007. The organizers plan to make the fair an annual event in Beijing, because Beijing is the major servicesoriented city in China. In 2011, the service industry generated 75.7% of the GDP of Beijing, well above the national average of 43%. The city’s 2011 trade in services hit USD89.5 billion, with both imports and exports accounting for over 20% of the country’s total.