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By Zong Fangyu, Research Team on “Strategic Options for the Promotion of China’s Service Trade Competitiveness”, Research Department of Foreign Economic Relations, DRC

Research Report, No.162, 2019 (Total 5662) 2019-9-17

Abstract: The commercial presence model accounts for the largest proportion in terms of scale in the four categories of service trades in China and, with a growth rate exceeding that of service import and export, has become an important growth driver of China’s service trade. In recent years, the new technological revolution has picked up speed, and the added value and importance of services have improved. As a two-way investment power that is shifting growth drivers from old to new, China faces new opportunities for developing commercial presence. Meanwhile, some developed economies are adopting more measures for investment protection. Given the high standards of the economic and trade rules in the service sector, China’s service trade with commercial presence model confronts a more complex and harsh competitive landscape as well as some prominent problems such as large in quantity, but weak in quality, huge adverse balance of trade and unsound structure. Looking ahead, China needs to advance reform and opening up, attract high-quality foreign investment, introduce advanced technology and services, and enhance enterprises’ competitiveness in the world. In addition, China needs to, with a global vision，take an active part in the high-level negotiations and the formulation of economic and trade rules so as to build China into a strong service power.

Key words: commercial presence, service trade, competitiveness