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Sale of intangibles expected to be motor for economic expansion

By ZHONG NAN | CHINA DAILY | Updated: 2022-09-07 08:43
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People visit the 2022 China International Fair for Trade in Services at the China National Convention Center in Beijing. [Photo by Zhang Wei/chinadaily.com.cn]

China's trade in services is expected to act as a long-term thriving force to shore up the nation's economic expansion, experts and business leaders said.

This comes after years of watching the nation's influence in service sector enlarged by factors such as soaring growth in foreign creative and cultural trade and knowledge-intensive services, they said.

Many opportunities have been prompted by rising exports of human capital-intensive services, consumers' surging demand for high-quality imports of foreign services and the further integration of traditional manufacturing and modern services, as well as dropping export volumes of China's labor-intensive products, said Wei Jianguo, vice-president of the China Center for International Economic Exchanges in Beijing.

As the educational level of China's young workers continues to improve, the nation's role in the international industrial chain has also been transformed from being a "world factory" to a "world office". Businesses in areas such as software design and modern logistics will create more jobs for China in the long run, said Jiang Xiaojuan, president of the Beijing-based Chinese Society of Public Administration.

Trade in services refers to the sale and delivery of intangibles such as transportation, finance, tourism, telecommunications, construction, advertising, computing and accounting.

"A huge upside still exists in the development of trade in services in China. The scope of this sector has extended to artificial intelligence, the metaverse and other fields, with huge potential and strong growth momentum," said Lawrence Jin, head of Deloitte's global Chinese services group.

He said that the Regional Comprehensive Economic Partnership, which came into effect in January, will bring transparency and predictability for trade in services to grow within the region, and provide more opportunities to service suppliers, covering financial, telecommunications, logistics and professional service areas, in RCEP member economies.

Focusing more on opening-up in trade in services, green growth and digitalization, China will help emerging businesses conduct innovative activities in its comprehensive bonded zones. It will also encourage importing technologies and services for energy and carbon reduction and expand the export of green and low-carbon technologies, Jin added.

The value of China's trade in services jumped 20.7 percent on a yearly basis to 3.39 trillion yuan ($489 billion) in the first seven months of 2022, while imports and exports of knowledge-intensive services totaled 1.42 billion yuan, increasing 10.2 percent from a year earlier, the Ministry of Commerce said.

China has also been accelerating the pace of new infrastructure and urbanization projects to further prop up its economic growth.

As a result, Swiss technology company ABB Group plans to grow its market share on the back of the surging demand for smart buildings and power facilities. The company said that the COVID-19 pandemic has brought unprecedented challenges to city and business management across China.

But the application of big data, artificial intelligence, 5G and other technologies in combating the disease has allowed the country to draw on the potential of digitalization and intelligent technologies in managing cities and business growth, said Roy Yang, ABB's marketing and sales manager for smart buildings and smart power divisions in China.

The company's technology has been used by many domestic companies and even by the sports venues for the 2022 Winter Olympics in Beijing and Zhangjiakou, Hebei province, to optimize power usage and save operating costs, Yang said. He added ABB will put more resources into the energy storage industry, data centers and charging facilities for electric vehicles in the coming years.

With the government seeking to join the Digital Economy Partnership Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, it is pushing the implementation of upgrading strategies in pilot free trade zones, supporting the growth of trade in services and providing foreign companies with greater transparency and certainty in all related fields, said Wang Shouwen, vice-minister of commerce.

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