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2015 Business Review XXII: Both Quantity and Quality of Trade in Services Improve while Imports and Exports Value Hit Record High

In 2015, against the backdrop of the deep adjustment of the world economy and greater downward pressure for domestic economy, the structure of China鈥檚 trade in services continued to be optimized, the coordination for regional development got intensified, the upgrading of foreign trade took further effect, and the size of imports and exports hit a record high. The characteristics of trade in service in 2015 are listed as follows:

1. Both imports and exports of trade in service saw growth. The imports and exports of service registered US$713 billion across the year, up 14.6% year on year. Among these, the exports and imports of service reached US$288.19 billion and US$424.81 billion respectively, up 9.2% and 18.6% respectively year on year. Both imports and exports of service sustained a rapid growth across the year, with a growth rate of more than 10% for twelve months in a row.

2. The structure of service exports continued to be optimized. Exports of high value added service expanded and the structure of service exports continued to be optimized. Exports of communications, computer and information service amounted to US$27 billion, going up 25% year on year, with an increase of 1.5 percentage points among total service exports. Exports of professional management and consulting service reached US$29.1 billion, up 13.6% year on year, 0.7 percentage point higher than that of 2014. Exports of advertising service and IPR royalty grew by 37.1% and 64.9% respectively, taking up higher percentage than last year.

3. Coordination of domestic regional development were stronger. The gap of domestic regional trade in service narrowed, the imports and exports of service in central and western China took up 15% of the national total, 6 percentage points higher than that at the end of the 11th five-year plan (2010). The regions of the national major strategic layout saw sound momentum of growth. The trade in service of 11 provinces and cities along the Yangtze River Economic Zone take up 40% of the national total, Beijing-Tianjin-Hebei region and China鈥檚 North-eastern region grew by 77%, 65% and 133% respectively in terms of the total imports and exports of service than that at the end of the 11th five-year plan.

4. The leading role in upgrading foreign trade structure is further shown. Trade in service took up 15.4% of the total foreign trade, with 2.7 percentage points higher than last year; service exports took up 11.2%, with 0.8 percentage points higher than that in 2014 while service imports took up 20.5%, 5.1 percentage points higher than that in 2014. At present, China is at a stage of transforming ways of economic growth and adjusting industrial structures, its trade in service is knowledge intensive, capital and technology intensive but with less resource consumption, so the rise of proportion will conduce to the optimization of China鈥檚 foreign trade structure.

5. The integration of trade and industry accelerated. The service sector and trade in service were integrated to promote each other. The adjustment of domestic industrial structures was accelerated to lead the transformation from industry-oriented to service-oriented, laying a solid industrial foundation for the development of trade in service. In 2015, the added value of service sector took up 50.5% of GDP, with a growth of 2.3 percentage points year on year; the service sector grew by 8.3%, 2.2 percentage points higher than the added value of industry (above scale). The co-movement between major areas of trade in service and domestic relevant industry development was constantly strengthened. Coordinative development was made between the imports and exports of the relevant service like telecommunications service, computer service, information service, IPR royalty, and television and radio services and domestic service sectors such as Internet service sector, software and information technology service sector, IPR service sector and broadcast, film, television, and radio service sector.

Since 2015, MOFCOM has unswervingly implemented the decision made by the central government, rendered great support to revitalize trade in service, and enhanced trade in service to adapt to the new normal actively, so as to seek development in innovation and make breakthrough in transformation.

1. Strengthening the top-level design of trade in service. In February, 2015, MOFCOM reported it to the State Council, printed and distributed the Opinions on Accelerating the Development of Trade in Service. It鈥檚 the first time that the State Council made comprehensive deployment to trade in service development. In May, 2015, the CPC central government and the State Council stood on a new height錛coordinating the top-level design of open economy and accelerating the construction of open and new economic system錛printing and distributing Opinions on Building Open and New Economic System. That raised the strategic position of trade in service, undertook to expand the size of trade in service, and promoted trade facilitation and liberalization. In August, 2015, the State Council approved to establish 鈥淪tate Council joint inter-ministerial meeting system for the development of trade in service.鈥It consisted of 39 departments of the State Council and was convened by vice premier Wang Yang.. In 2015, MOFCOM also started to compile the 13th five-year plan for trade in service.

2. Promoting to the implementation of the trade in service policies. MOFCOM organized to carry out documents made by the State Council on trade in service, service outsourcing and culture trade. MOFCOM also strengthened to publicize and break down tasks, played an exemplary role and made active efforts to accelerate the implementation of policies. Efforts were made to perfect the business environment according to the rule of law and draft the first edition of Rules of International Trade in Services. Furthermore, MOFCOM strengthened the planning and guidance on key areas of service exports and formulated Guidance Catalogue on Key Areas of Service Exports, which is to be distributed very soon. MOFCOM also formulated Pilot Plans for Innovative Development of Trade in Services to speed up the pilot work.

All departments made active efforts to implement and support policies. The support fund for trade in services in 2015 reached RMB1.2 billion, up 53% year on year. The range of zero-tariff for services exports was extended. The Ministry of Finance and the State Administration of Taxation have incorporated the radio, film and television services, technology transfer service, and offshore service outsourcing into the range of zero-tariff for service exports. China Banking Regulatory Commission and the People鈥檚 Bank of China encouraged financial institutions to innovate financial products and services. The Ministry of Commerce, the General Administration of Customs and the State Administration of Foreign Exchange jointly enhanced the facilitation of trade in services.

The local governments will render great support to the trade in services development so as to step up economic structure adjustment and foreign trade growth. They have issued policies and documents to support the development of regional trade in services, established coordination mechanism for the development of trade in services led by province and city leaders, increased financial support and enhanced the development of trade in service.

3. Deepening international cooperation. MOFCOM held a work group conference on trade in services with India, established cross-straits statistics cooperation mechanism of trade in services with Taiwan district and made positive contacts with Singapore through the organization of bilateral cooperation promotion working group.

4. Perfecting statistics group. MOFCOM started to use the latest edition of the IMF's Balance of Payments and International Investment Position Manual (BPM6) to conduct its work of statistics on trade in services, with all the accuracy, efficiency and classification of data being improved.

Next, MOFCOM will implement the deployment according to the documents made by the State Council and the first plenary meeting of Joint Inter-ministerial Conference, continue to carry out the revitalization projects for trade in services and jointly carry out the Outline of Promoting the Development of Trade in Services 2016. Work will be made to accelerate the implementation of policies made by the State Council, concrete division of labor will be made, the schedule and stage goals will be worked out. MOFCOM will make active efforts for the pilots鈥construction for the innovative development of trade in services, report the pilot list and plans to the State Council for approval, guide pilots regions to improve the implementation plans and step up pilots鈥construction. Efforts will be made to join hands with other member units of the joint conference to compile the 13th five-year plan for trade in services. We will accelerate the legislative study on Rules of International Trade in Services and gradually perfect laws and regulations for trade in services. Statistical work for trade in services will be further done to establish horizontal and vertical data sharing platform, improve statistical indicator system and explore more efficient statistical methods with the relevant departments so as to improve the accuracy, efficiency and authority of statistics of trade in services.

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