Bo Xilai:Service Industry Will Be the Kev Part of the Next Round of Opening Up

Bo Xilai, Minister of Commerce, said that Chinesegovernment will attach more importance to the pro-motion of service industry and the development ofservice trade, make the service trade the focus of the nextround of opening up, speed up the development of domesticservice industry, to promote the development of the worldservice trade and world economy through the communica-tion and cooperation with other countries.

Bo said, Chinese government is open. The general levelof tariff has decreased from 35% in 1994 to 9.9%. The ser-rice trade market is open, too. Among the 160 service tradesectors in the category of WTO, the developed countries cov-ered 80%, developing countries 20%-40% and China reached62% last year.

According to some authoritative statistics, after the open-ing up,China's service tradehas developed greatly. In1982, China's service trade isonly US$4.6 billion and thenumber grew up to USS 128.6billion in 2004. The annualgrowth rate is 16.3%. In1982, China's service tradeaccounts for less than 0.6%in the world service trade,listed the 34th in the world.In 2004, this ratio increasedup to 2.8%, listed the 9th inthe world.

Bo points out that eventhough the service tradegrows rapidly, but the generallevel is low. First, the servicetrade lagged behind the goodstrade. In 2004 the service ex-port accounts for 9% in thetotal export, which is appar-ently lower than the world average level 19%. Second, theservice trade has been stay on the status of adverse balance,in 2004, the adverse balance is US$10.8 billion. Third, thepredominant sectors centralized in sea transportation and tour-ism, while the competitive capacity of the modem industryas finance, insurance and computer is low.

Bo strengthened that three key facts should be focusedwhile developing service trade. First,encourage competitionand innovation. Second, education and talents should be at-tached more importance to. third, seek for the service tradedevelopment in the process of opening up. According to thestatistics, one third of the direct investment of developed coun-tries was invested into the modem service industry. Thismethod is worthwhile to learn. During the past 20 years, theabsorbed foreign fund was mainly put in industrial sectorsand manufacture industry. In the future, to absorb more for-eign fund to invest in service trade will be an important do-main for the cooperation with other countries.