The Ministry of Commerce announced at a special press conference on the expansion of the comprehensive pilot project for the further opening-up of the service industry. While supporting Beijing to build a national comprehensive demonstration zone for service industry opening-up expansion, Tianjin, Shanghai, Hainan, and Chongqing will be included in the pilot program. It is conducive to forming a “1+N” pilot pattern, implementing wider, broader, and deeper opening-up, and building a new higher-level open economic system, which is of great significance to a new development paradigm.
In 2015, the State Council issued and implemented the Framework Plan for the Comprehensive Pilot Project of Opening-up of the Services Sector in Beijing. On this basis, the State Council approved the launch of comprehensive pilot projects for expanding the opening-up of the service industry in Tianjin, Shanghai, Hainan, and Chongqing on April 9 this year with a pilot period of 3 years. This has also become the first “expansion” of the comprehensive pilot project for further opening-up of the service industry after 6 years.
Zong Changqing, Director of the Department of Foreign Investment Administration of the Ministry of Commerce, said that expansion of the comprehensive pilot project for further opening-up of the service industry caters to the need to shape new advantages in international competition and cooperation. At present, the opening-up of the service industry in China faces both important opportunities and practical gaps. To start with, the per capita GDP of China’s 1.4 billion people has exceeded the 10,000 U.S. dollar, and the consumption pattern is shifting from physical goods to service at a faster pace. The absorption of foreign capital by the service industry has accounted for more than 70% of the total foreign capital absorption. Furthermore, the added value of service industry in China currently accounts for about 55% of GDP, which is about 20% lower than that of developed countries. China still suffers from insufficient integration with the manufacturing industry and insufficient development of the modern service industry. Therefore, it is necessary to further expand the opening-up of the service industry, continue to cultivate new development drive, and shape new advantages in international competition and cooperation.
The expansion of the comprehensive pilot program for opening-up of service industries can give better play to the initiatives taken by local governments. The opening-up of service industry covers extensive range of categories. It not only involves the overall planning of the producer service industry and the life service industry, but also involves the development of various new models and new formats, and requires multi-dimensional innovation and exploration. The four provinces and municipalities in the pilot project enjoy solid foundations for the service industry, with strong regional and industrial representativeness. Through reform and innovation, the initiative of local governments can be tapped to accumulate more replicable experience during work that could be promoted elsewhere, and it will serve as a role model for the opening-up of service industry across the nation.
In addition, the expansion of comprehensive pilot projects for opening-up new industries is also conducive to strengthening openness and coordination. The newly-added pilots will help to form a tiered cooperation and coordination with the demonstration zone in Beijing. Implementation of pilot project policy and replication and promotion of experience will be conducted to have experiments and demonstrations at multiple points to form a comprehensive effect.
It is reported that the 4 provinces and municipalities pilot program will follow the decision and arrangement of the Central Committee of the Communist Party of China (CCCPC) and the State Council, benchmark against advanced international trade and investment rules, draw on the previous pilot project experience, and integrate with local positioning to identify a total of 203 pilot tasks, covering industrial opening, regional development, institutional mechanisms building, policies, and guarantees of production factors.
Cai Zhenwei, Deputy Director of the Hainan Free Trade Port Research Center of the National Institute for South China Sea Studies (NISCSS), said in an interview with China Trade News that the service trade is getting more important from a global perspective. The proportion of service trade in total trade has become one of the important indicators to measure the modernization level of a country’s economic mix and international competitiveness. There is huge room and potential for the development of service trade in China. According to statistics, the added value of the service industry accounted for 54.5% of GDP in China in 2020, which is still far below the level of developed countries. Continuing to expand the opening-up of the service industry and accelerating the high-level opening up with service trade as the focus is of great significance to promoting industrial restructuring.
Cai Zhenwei said that the expansion of pilot program of opening-up in the service industry will provide replicable experience for further opening-up of the service industry, effectively enhance the international presence of service industry in China, and inject strong impetus into the development of service trade in China. Moreover, it will help service industry in China to fully align with international rules, provide beneficial exploration for bilateral and multilateral free trade agreement negotiations, and promote better integration and participation of China in the formulation of global service trade rules.
Cai Zhenwei believed that the inclusion of Tianjin, Shanghai, Hainan, and Chongqing into the comprehensive pilot program for expanding the opening-up of the service industry has effectively expanded the scope of the pilot program. From the perspective of specific implementation plans, the four provinces and municipalities focus on the major national strategic missions they undertake, combined with the opening needs of tourism, finance, commerce, medical care, education, and other fields. The key tasks of each pilot are different in their priorities. In particular, the Hainan Free Trade Port will soon issue a negative list of cross-border service trade, which will promote wider market access in the service sector and speed up the process of opening-up in the fields of medical care, education, and culture.