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Service trade innovation to upgrade foreign trade

Updated: Feb 15,2016 4:33 PM

On Feb 14, the State Council executive meeting decided to carry out test projects for the innovative development of the service trade in the next two years in 10 provincial and five state-level new districts, exploring institutional improvements and gradually opening market access in the service industry.

The pilot projects will promote foreign trade transformation and improve competitiveness in the service industry.

In addition to promoting goods trade, the tests will also boost service trade development and optimize foreign trade structure, cultivating new driving forces and creating jobs.

Data from the Ministry of Commerce shows that during the 12th Five-Year Plan period, service trade in China witnessed rapid development as annual increases in trade volume reached 14.5 percent and trade scale ranked second in the world.

In the meantime, software, technology, and culture services take up half of the emerging service exports, becoming the new engines of foreign trade transformation and upgrade.

The highlight is that even under the context of world economic adjustment and domestic downward pressure, China’s service trade structure continued to optimize, and foreign trade structure upgrades were effective as import and export scale hit historical records and service exports and imports increased.

The pilot projects for innovative development of the service trade is an important part of structural reforms in 2016, and the focus will be service trade exports regarding project contracting, design consultation, technology transfers, financial insurance, international transport, education and training, information technology, and national culture.

At the same time, the technology spillover effect of foreign-invested enterprises in service trade will be used to advantage to improve technology and management in domestic enterprises and optimize service trade structure.

The tests are also an important measure to improve foreign trade transformation as development theories such as innovation and manufacturing turn out to be development opportunities. Among the development theories, Internet Plus provides transformation and upgrade opportunities for China’s service trade.

Policy measures brought up at the State Council executive meeting to support high-tech and high value-added enterprises through tax reduction, guidance funds and financing support will improve the service trade, optimize service trade structure, and promote foreign trade transformation.