The 13th Five-Year Plan for Trade in Service Development




The 13th Five-Year Plan for Trade in Service Development is compiled according to the Outline of the 13th Five-Year Plan for Economic and Social Development of People’s Republic of China and the Outline of the 13th Five-Year Plan for Business Development.


I. Development Trend


1.Development basis

During the period of the 12th five-year plan, under the leadership of the central committee and the State Council, China accelerated the building of the open economic system, and promoted the reform and opening-up in service sector. Tasks of Trade in service have been completed successfully and trade in service has played a greater role in national economy.


Trade size expanded rapidly. During the period of the 12th five-year plan, the average annual growth of service import and export was 15.7%, climbing up to the second in the world from the 4th at the end of the 11th five-year plan. Among these, the average annual growth of service export was 11% and that of service import was 19.4%. In 2015, the import and export of service registered US$752.9 billion, of which service export reached US$286.7 billion, ranking the 3rd in the world and service import came to US$466.2 billion, ranking the 2nd in the world. The percentage that trade in service takes up in China’s foreign trade (the total sum of trade in goods and trade in service) that China’s service export takes up in the global service export and that China’s service import takes up in the global service import all rose, climbing to 16%, 6% and 10.1% respectively in 2015, 5.1, 2 and 5.2 percentage points higher than that at the end of the 11th five-year plan respectively.


Industrial structures continued to be optimized. Traditional areas like transport, tourism, and architecture maintained a rapid growth and emerging areas like technology, culture, computer and information service, consulting, finance and traditional Chinese medicine service began to accumulate advantages and pace up. In 2015, exports of computer and information service, and insurance service amounted to US$24.55 billion and US$5 billion, taking up 8.6% and 1.8% respectively, with 1.8 and 0.7 percentage point higher than that at the end of the 11th five-year plan respectively. Service outsourcing grew fast. The executed value of international service outsourcing undertaken by Chinese business in 2015 registered US$64.64 billion, and the average annual growth during the 12th five-year plan was 28.3%. China has become the world second largest service provider.


Regional development tended to be coordinated. The eastern coastal region centering on Beijing, Shanghai and Guandong is the most intensive region for China’s trade in service development, and western and central China are new-rising force to pull up the trade in service. Eastern region and central and western regions took up 85.8% and 14.2% respectively in terms of service import and export in 2015, and the percentage that central and western region took up has raised 6 percentage points compared with that at the end of the 11th five-year plan. Trade in service in major areas saw sound momentum of growth. Trade in service in 11 provinces and cities along the Yangtze River Economic Belt, Beijing-Tianjin-Hebei region and Northeast China grew up 77.1%, 64.6% and 133.1% respectively during the period of the 13th five-year plan.


Market expansion effect began to take on. Market concentration of trade in service was further raised. China’s top ten trade in service partners took up 62.4% of the total service import and export, 2.1 percentage points higher than that at the end of the 11th five-year plan. The number of countries and regions from which China undertook international service outsourcing has reached 197, with an increase of 29 compared with that at the end of the 11th five-year plan. So far, China has signed MOU on trade in service cooperation with 7 countries and regions, and established trade in service promotion work mechanism to conduct bilateral pragmatic cooperation.


2. Development Prospect


1. Opportunities Faced


From the international perspective, firstly, the strategic position of service industry and service trade is more prominent. The integration trend of service industry and other industries is being enhanced. As a core part of the global value chain, technology and knowledge-intensive services have become a key factor affecting the international division of labor and the distribution of trade benefits. Transnational corporations in the traditional manufacturing sector have transferred to service providers. Secondly, the breadth and depth of trade in services and investment cooperation continue to expand. In 2015, the world exports reached US$4.7540 trillion and the proportion of exports of goods and services rose to 22.4%. Investment in services accounted for more than 60% of global direct investment stocks, and cross-border mergers and acquisitions in services accounted for more than 50%. Thirdly, service trade innovation in the digital era is accelerating constantly. The usage of big data, cloud computing, Internet of things, mobile Internet technology, greatly improved possibility of service trade; profound changes were undergoing have been taking place in trade enterprise form, business model and trading mode..


From the domestic perspective, firstly, the industrial base for the development of trade in services was more solid. The structural reform of supply side was promoted in depth, which was conducive to promoting the production factors to gather together in the service area. The proportion of added value of services in 2015 exceeded 50% for the first time and was expected to increase to 56% by 2020. Secondly, the advantage of the international market network formed by foreign trade and economic cooperation was more obvious. China has established trade ties with 230 countries and regions, and the status of trade in goods is conducive to the development of related services trade. Overseas investment and cooperation were accelerating the development, and commercial presence model of service trade has great potential for development. Thirdly, the service trade development environment was constantly optimized. The pace of reform and opening up in the field of service trade is accelerating. The free trade pilot area, the expansion of the service industry in Beijing and the construction of a high standard free trade area network around the world would expand the new space for trade in services development. The pilot of innovative development of service trade was further promoted and the policy system was more perfect.


2. Challenges Faced


From the international perspective, firstly, the world economic recovery was slow. The deep impact of international financial crisis still exists, and the world economy continues to be adjusted and the growth is slow. The development of China's trade in services faces weak foreign demand, trade protectionism and other unfavorable factors. Secondly, the international competition of trade in services increased. Developed countries strived to consolidate the status of international competition for service trade. Developing countries have increased support for trade in services, and strived to move towards the high-end division of labor in global value chain and international service industry. Thirdly, the international trade rules in the field of trade in services faced reconstruction. Developed countries actively promoted the negotiation of trade in services rules, and constantly improved the service industry open standards. The fight for the formulation right of international rules of service trade was more intense.


From the domestic perspective, firstly, China's economic development was still facing some constraints. The cost of labor, land and other factors continued to rise, the constraints of resources and ecological tightened, the new competitive advantage was yet to be cultivated. Secondly, the service industry, especially the development of producer services was lagging behind. The gap of the productive service industry between China and the developed countries was obvious, and the industrial base for the development of trade in services was still weak. Thirdly, the development of trade in services was facing obvious problems. Trade deficit was big, service export scale and quality needed to be improved. Service trade structure needed to be optimized, the development of new industries lagged behind. The service trade promotion system needed to be perfected and the policy framework was not perfect.


Looking at the overall international and domestic situations, the international and domestic environment faced by China's service trade in the "13th Five-Year" period is favorable on the whole, and there are more development opportunities than challenges. Efforts should be made to understand the current historical position of the development of trade in services, and comprehensively enhance the strategic position of trade in services, more actively and effectively respond to various risk challenges, and strive to promote trade in services to a new level. II. Development Ideas

1. Guiding Thought

Comprehensively implement the spirits of the 18th National Congress of the CPC and the 3rd, 4th, 5th and 6th Plenary Sessions of the 18th Central Committee of the Chinese Communist Party, thoroughly implement the spirit of General Secretary Xi Jinping's important speeches, firmly establish the development ideas of innovation, coordination, green, openness, and sharing. Stick to the decisive role of the market in resource allocation and better play the role of the government. Take promoting the supply-side structural reform of service trade as the principal line, make a solid foundation for service trade, optimize the service-trade system and mechanism, policy framework, and promotion system. Improve the opening level and facilitation level of service trade, strengthen export capacity of service, expand the scale of service trade, optimize the structure of service trade, and promote the coordination and common development of service trade and trade in goods, as well as service trade and outward investment.

2. Development Idea

At first, stick to innovative development. Comprehensively implement the innovation-driven development strategy, actively promote the technological innovation and business modes innovation of service trade. Expand the development fields of service trade, and improve the tradability of traditional service. Vigorously develop new type services like cross-border e-commerce, supply chain management, service outsourcing and crowdsourcing. Promote the integration development of service industry and manufacturing industry, service trade and goods trade. Quicken the formation of new comprehensive competitive advantages like human resources, technology, brands, intellectual property, standard and market network.

2. Stick to coordination development. Pay attention to the coordinative cooperation between service trade and the service industry, goods trade and international investment and cooperation. Continuously make a solid industrial foundation for the development of service trade and a solid foundation for international economic and trade cooperation. Make efforts to expand service export, promote the coordinative development of service export and import, and narrow the deficit of service trade. Highlight the advantages and featured fields of local service trade, and pay more attention to the cultivation of center cities of service trade to drive the coordinative development of local service trade. Push forward the coordinative development of different fields of service trade, vigorously promote the export of knowledge technology intensive services, and make efforts to optimize the structure of service trade.

3. Stick to green development. Run the concept of green development through all the fields and links of service trade development. Actively promote the digitization of service trade. Encourage the green purchasing and selling of service trade enterprises, promote the energy conservation and emission reduction of service trade enterprises, and vigorously develop green and low-carbon service trade. Encourage and promote the internationalization development of green and low-carbon service trade enterprises.

4. Stick to opening up and development. Promote the orderly opening up of services, relax investment admittance, comprehensively carry out the management mode of pre-establishment national treatment plus negative list, break regional blockades and trade monopoly, and clear the system and mechanism obstacle of the development of service industry. Strengthen multilateral, regional and bilateral cooperation of service trade, and make efforts to exploit international market. Support enterprises and public service organizations to go out and carry out the layout of the international markets, and actively make use of FTA to strengthen the exploitation of the market in specific countries.

5. Stick to development sharing. Firmly establish the concept of sharing development, make full use of the role of service trade to stabilize growth and expand employment. Encourage the innovation and entrepreneurship in e-commerce and service outsourcing. Accelerate the development of service trade for life. Make efforts to enhance the quality of services closely related to the people like service for the aged, medical care and education, which inends to promote social welfare.

III. Development Goals

Further consolidate the status as a large country of service trade, and accelerate the construction of a strong country of service trade. Make efforts to increase the annual growth rate of service trade above the annual growth rate of the global service trade during the 13th Five-Year Plan. Further promote the proportion of export of intensive technology and knowledge and high value-added service. The advantage of intensive human resources and services with Chinese features should be further consolidated. The strategic status of service trade in the development of opening economy is obviously promoted.


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