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I. General analysis
1. Trade in services expanding in scale
In 2006, the import and export of services transacted between China’s residents and non-residents (as per BOP statistics, excluding government services, the same below) continued to expand in scale, hitting another new record high. Its import and export of services totaled USD 191.75 billion, up 22.1% over 2005. Of which, its export of services reached USD 91.42 billion, a 23.7% increase, and its import of services USD 100.33 billion, a 20.6% increase. In 2006, China was in the eighth place in the world for its export of services and in the seventh place for its import of services, maintaining the 2005 level.
2. Proportion taken in global exports of services rising
In 1980s, the ratio of China’s export of services to total global export volume remained to be 1%, and was on a rise since the late 1990s. In 2006, the figure climbed to 3.4%, up 0.4 percentage points over 2005.
3. Proportion taken in China’s total exports declining
In 2006, China’s exports of services and goods increased by 23.7% and 27.2% respectively, and the proportion taken by its export of services in the exports of services and goods was 8.6%, down 0/3 percentage points over 2005. During the same period, in the US and India it decreased by 0.9% and 5.1%, both higher than that in China
4. Trade deficit in services shrinking
In 2006, China’s trade deficit in services stood at USD 8.91 billion, down 3.9% over 2005, and continued to decline as in 2005. From 1998 through 2006, the figure rose from USD 2.59 billion to USD 9.55 billion, the highest level in recent years, and began to drop since then.
China’s shrinking trade deficit in services was ascribed to the increased surplus in travel, computer and information services and other business services. In 2006, China’s travel surplus reached USD 9.63 billion, a 27.7% year-on-year increase. The surplus in high value-added computer and information services amounted to USD 1.22 billion, increased by 460% considerably. For other business services, the surplus reached USD 8.43 billion, a 12.5% increase.
China’s trade deficit in services was still concentrated in services such as transportation, insurance, and royalties and license fees. In 2006, China’s transportation deficit amounted to USD 13.35 billion, a slight increase over 2005. With the rapid growth in import, the deficit in insurance services continued to grow, and reached USD 8.28 billion in 2006, increased by 24.6%. For royalties and license fees, the figure was USD 6.43 billion, a 24.5% increase. Although the deficit in financial services was merely USD 750 million, a small deficit, the import of financial services surged, up by 456.9% over 2005, ,and was much as 6 times the export of financial services.
II. Analysis by country/region
In terms of gross import and export volume, Hong Kong, the US, EU and Japan were the first four largest partners in trade in services for Chinese Mainland. The exports and imports to and from them totaled over USD 20 billion, together accounting for over 50% of China’s total import and export of services. Among them, Hong Kong took the first position, accounting for nearly one fifth (1/5) of the total, to be followed by the US and EU respectively. In terms of export, Hong Kong was the No.1 market for the export of services from Chinese Mainland. In 2006, the share of the Mainland’s export of services to Hong Kong was 30%, far higher than to other countries and regions in relation to the total export volume of services. The US, EU and Japan together accounted for about 10% of China’s total export of services.
In terms of import, EU was the largest source for import of services by China. Hong Kong, EU, the US and Japan were the four top sources for import of services by Chinese Mainland. Services imported by Chinese mainland from the above four regions accounted for over 50% of its total service import volume.
In 2006, Chinese mainland realized a trade surplus in services over Hong Kong, Russia, Taiwan and Singapore, but its trade in services with most other countries (regions) appeared to be in deficit. Among them, Hong Kong was the largest source for the surplus in trade in services, which was nearly USD 10 billion, and EU was the largest source for deficit in trade in services.
III. Analysis by sector
In 2006, China’s trade in services kept growing steadily in traditional sectors, while its imports in emerging sectors rose remarkably, with improved structure of trade in services. Imports and exports in traditional sectors like transportation and travel continued to grow, having a fairly large share in service imports and exports, which however dropped. Imports and exports of transportation and travel services accounted for 28.9% and 30.4% of China’s total service imports and exports respectively, or 59.3% altogether, down 1.1 percentage points over 2005. For emerging services, exports of computer and information services, communications, and consulting services grew fast, increased by 60.8%, 52.2% and 47.2% over 2005 respectively, and their shares in China’s total service exports rose by 1%, 0.1% and 1.4% respectively. Imports of financing and consulting services increased considerably by 460% and 35.7% over 2005 respectively, and their shares in China’s total imports of services rose by 0.7% and 1% respectively.
In 2006, travel, transportation, other business services, consulting, computer and information services took the first five positions in export of services respectively; transportation, travel, other business services, insurance and consulting services ranked the first five in import of services.
1. Transportation
In 2006, China’s export and import of transportation services expanded greatly, with the export volume of USD 21.02 billion, a 36.2% increase, and the import volume of USD34.37 billion, a 20.8% increase. From 2000 through 2006, the average yearly growth rate for China’s export of transportation services was 34.1%, and the proportion taken by China’s export of transportation services in China’s total service exports rose to 23% from 12.2%. It was the second largest sector in terms of export of services, merely next to travel services. In the same period, the average yearly growth rate for China’s import of transportation services was 22.4%, and the proportion taken by China’s import of transportation services in China’s total service imports increased to 34.2% from 29%, making transportation a sector with the largest import. Trade in transportation services remained to be in deficit, which continued to be enlarged and rose to USD 13.35 billion in 2006 from USD 6.73 billion in 2000, making transportation a sector with the largest deficit.
In 2006, Hong Kong, the US and EU were still the first three largest markets for Chinese Mainland in terms of export of transportation services, together accounting for two thirds (2/3) of China’s total export of transportation services. In 2006, the US was, instead of EU, No.1 source for China’s import of transportation services. There were other major sources for import of services including EU, Japan, ROK, Hong Kong and ASEAN, each accounting for 10% of Chinese mainland’s total import of transportation services, and together accounting for over 70%. China’s trade deficit in transportation services was for the most part due to its trade with such counties or regions as ROK, ASEAN, EU, Taiwan and Japan.
2. Travel
In 2006, China’s import and export of travel services both grew by over 10%. Its export of travel services reached USD 33.95 billion, a 15.9% increase over 2005, and its import of travel services USD 24.32 billion, an 11.8% increase. From 2000 through 2006, the average annual growth rate for China’s export of travel services was 13.1%. Tourism remained as the largest sector in terms of export of services, and its share in China’s total export volume of services fell to 37.1% from 53.8%. In the same period, the average annual growth rate for China’s import of travel services was 10.8%. Tourism was the second largest sector in terms of import, merely next to transportation, and its share in China’s total import volume of services dropped to 24.2% from 36.6%. There was a trade surplus in travel services, which grew fast from USD 3.12 billion in 2000 to USD 9.63 billion in 2006, making tourism a sector with the largest surplus.
In 2006, the export markets for Chinese mainland’s travel services were mainly Asian countries and regions including Hong Kong, Taiwan, ROK, Japan and ASEAN, together accounting for over 60% of the total export volume of travel services. Hong Kong was the largest source for import of tourism, accounting for about one fourth (1/4) of the total. Next to Hong Kong was EU, but its import volume was merely half of Hong Kong’s.
3. Communication services
In 2006, China’s trade in communication services grew remarkably, with the export volume of USD 740 million, a 52.6% rise, and with the import volume of USD 760 million, a 26% rise. The trade deficit fell by 75% over 2005. From 2000 through 2006, China’s export of communication services was on a decrease, but its import of communication services increased by 21%, with its share in China’s total import volume of services rising by 0.1 percentage points.
In 2006, EU and the US surpassed Hong Kong and became the first and second largest markets for Chinese Mainland’s communication services respectively, and Hong Kong fell to the third place. They together accounted for about 60% of China’s total export volume of communication services. In import, the US became the largest source for China’s communication services, instead of Hong Kong, and Hong Kong and EU took the second and third positions respectively. They together accounted for over 75% of China’s total import volume of communication services. The deficit in communication services was mainly attributable to the US and Hong Kong.
4. Construction services
In 2006, China export of construction services stood at USD 2.75 billion, up 6.2% over 2005, and its import of construction services USD 2.05 billion, up 26.6%. From 2000 through 2006, China’s export of communication services grew at an average annual rate of 28.8%, and its share in China’s export of services rose from 2% to 3%. In the same period, China’s import of communication services grew at an average annual rate of 12.9%, and its share in China’s export of services shrank. In this sector, surplus has replaced deficit since 2002, but it continued to dwindle.
In 2006, Chinese Mainland’s export of communication services mainly went to Hong Kong, with its share in China’s export of construction services being over 20%, slightly lower than that in 2005. Next to it were EU, the US, ASEAN and Canada. Together the five accounted for over 50% of China’s total export volume of construction services. Chinese Mainland’s import of construction services was mainly concentrated in Hong Kong, ASEAN, the US and EU, together accounting for 45% of the total. The deficit in construction services was mainly attributable to Hong Kong, Canada and EU.
5. Insurance services
In 2006, China export of insurance service reached USD 550 million, down 0.2% over 2005, and its import of insurance services USD 8.83 billion, up 22.7%. From 2000 through 2006, China’s export of insurance services expanded at an average annual rate of 31%, and its share in China’s export of services rose from 0.4% to 0.6%. In the same period, China’s import of insurance services grew at an average annual rate of 24%, and its share in China’s export of services jumped from 6.9% to 8.8%. In this sector, there was in increasing deficit, and its average growth rate was 23.2% from 2000 through 2006, making it a sector with the second largest deficit, merely next to transportation services.
Chinese Mainland’s export of insurance services was relatively concentrated in certain countries and regions. In 2006, Hong Kong, the US and EU were the first three export markets for Chinese Mainland’s insurance services, together accounting for 80% of Chinese Mainland’s export of insurance services. The Mainland’s import of insurance services was comparatively limited and occasional, from a multitude of countries and regions including Japan, ROK, ASEAN, Taiwan, EU and the US. In 2006, the mainland’s trade in insurance services with these major countries and regions still remained to be in deficit, mostly due to its trade with Japan, ROK, ASEAN, Taiwan and EU.
6. Financial services
In 2006, thanks to its considerably increased import of insurance services, China had a large deficit of USD 750 million in the insurance service sector, up 5200% over 2005. Of which, the export of insurance services stood at USD 150 million, the same level as in 2005, and the import of insurance services USD 890 million, up 560% over 2005. The rapid growth in China’s import of insurance services was mainly ascribed to the growing number of domestic companies listed overseas, resulting in the rise in revenues arising from services like securities underwriting. From 2000 through 2006, China’s export of insurance services grew at an average annual rate of 11.5%,but its share in China’s export of services dropped; China’s import of insurance services grew at an average annual rate of 44.7%, and its share in China’s export of services increased from 0.3% to 0.9%.
In 2006, Hong Kong was still the largest export market fro Chinese Mainland’s insurance services, taking up about two thirds (2/3) of Chinese Mainland’s export of insurance services. In 2006, the remarkable increase in Chinese Mainland’s import of insurance services was chiefly attributable to the increased import of insurance services from Hong Kong. In the same year, Hong Kong, instead of EU, became Chinese mainland’s largest source for import of insurance services, sharing four fifth (4/5) of the total, far higher than that from other countries and regions like EU and the US. Although china’s trade in insurance services with other major countries appeared in general to be in deficit, but its deficit was for the most part attributable to Hong Kong.
7. Computer and information services
In 2006, China’s export of computer and information services reached USD 2.96 billion, up 60.8% over 2005, and its import of computer and information services USD 1.74 billion, up 7.2%. The surplus rose remarkably by 450% over 2005. From 2000 through 2006, China’s export of computer and information services expanded at an average annual rate of 42.3%,and its share in China’s export of services went up from 0.3% to 3.2%. In the same period, China’s import of computer and information services grew at an average annual rate of 36.8%, with its share in china’s export of services rising from 0.7% to 1.7%.
In 2006, the US, Hong Kong, ASEAN and EU were the first four export markets for Chinese mainland’s insurance services, together accounting for 80% of Chinese mainland’s export of computer and information services, with Hong Kong enjoying the fastest growth.. The Mainland’s import of insurance services was relatively concentrated in several sources, with EU, the US and Hong Kong being major sources, together accounting for over 75% of the total. In import, Hong Kong enjoyed the fastest growth, while Japan fell to the fifth place from the second place in 2005. In this sector, the deficit was for the most part attributable to the US, Hong Kong and ASEAN.
8. Royalties and license fees
In 2006, China’s export of royalties and licenses reached USD 210 million, a 30.6% increase over 2005, and its import of royalties and licenses USD 6.63 billion, a 24.7% increase. From 2000 through 2006, China’s export of royalties and license services increased at an average annual rate of 17.4%, and its share in China’s export of services went down. In the same period, China’s import of royalties and license services grew at an average annual rate of 31.5%, with its share in china’s export of services rising from 3.6% to 6.6%. In royalties and license fees, China had a deficit for a long time, which kept growing, making it a sector with the third largest deficit.
Hong Kong still remained to be the largest export market for Chinese Mainland’s royalties and license services, followed by the US and EU, together the three accounting for over 70% of Chinese Mainland’s export of royalties and license services. Its import was mainly concentrated in developed countries like the EU and EU, together taking up 60% of the total. In this sector, the deficit was for the most part attributable to the US, EU and Japan.
9. Consulting services
In 2006, China’s import and export of consulting services both grew remarkably, and their share in China’s import and export of services rose considerably. Of which, China’s export of consulting services stood at USD 7.83 billion, up 47.2% over 2005, and its import of consulting services USD 8.39 billion, up 35.7%. From 2000 through 2006, China’s export of consulting services expanded at an average annual rate of 67.4%, and its share in China’s export of services climbed to 8.6% from 1.2%. In the same period, China’s import of consulting services grew at an average annual rate of 53.6%, with its share in China’s export of services rising from 1.8% to 8.4%.
Chinese Mainland’s export of consulting services was mainly directed to Hong Kong, the US and EU, which together accounted for over 70% of China’s export of consulting services. EU and Japan still remained to be the first two sources for import of consulting services by China, while Hong Kong overtook the US and became the third largest source. They together took up one third (1/3) of China’s total import volume of consulting services. Chinese Mainland had a trade surplus in consulting services with Hong Kong and the US and a trade deficit with EU, Japan and ROK.
10. Advertising, publicity
In 2006, China’s import and export of advertising and publicity services both increased by over 30%, with its export volume of USD 1.45billion, a 34.3% increase over 2005, and its import volume of USD 960 million, a 33.6% increase. The deficit was USD 490 million, increased by 36.1%. From 2000 through 2006, China’s export of advertising and publicity services expanded at an average annual rate of 36.6%, and its share in China’s export of services rose to 1.6% from 0.7%. In the same period, China ‘s import of advertising and ;ublicity services grew at an average annual rate of 29.7%, with its share in China’s export of services rising from 0.6% to 1.0%. In this sector, there has been a surplus for four consecutive year, which kept growing considerably.
In 2006, the US, instead of Hong Kong, became the largest market for export of advertising and publicity services by Chinese Mainland. Next to it were Hong Kong, Japan, EU and ASEAN. They together account for 90% of Chinese Mainland’s export of advertising and publicity services. In 2005, the Mainland still imported advertising and publicity services mainly from Hong Kong, with a 40% share. Next to it were EU and the US. Other countries and regions had a relatively small share. The surplus in advertising and publicity services were for the most part attributable to Japan, ASEAN and the US.
11. Film, audiovisual services
In 2006, China exported and imported film and audiovisual services worth of USD 140 million and USD 120 million respectively, increased by 2.2% and decreased by 21.4% over 2005 respectively, with the surplus of USD 20 million. From 2000 through 2006, China’s export of film and audiovisual services expanded at an average annual rate of 52.8%, and its share in China’s export of services rose to 0.2% from nearly zero. In the same period, China’s import of film and audiovisual services grew at an average annual rate of 21.7%, with its share in China’s export of services remaining unchanged.
In 2006, the US and Hong Kong were still the main markets for Chinese mainland’s export of film and audiovisual services, accounting for over one third (1/3) and over one fourth (1/4) of the total respectively. In import, Hong Kong, instead of EU, was the largest source. Next to it were the US, EU and ASEAN. The deficit in film and audiovisual services was mainly attributable to the US and ROK.
12. Other business services
The year 2006 also saw a considerable growth in China’s import and export of other business services, but its share in China’s import and export of services was on a decrease. Of which, its export volume was USD 19.69% billion, up 16.6% over 2005, and its import volume USD 11.26 billion, up 20%, with the surplus of USD 8.43 billion. It was a sector with the second largest surplus, merely after travel services. From 2000through 2006, China’s export of other business services grew at an average annual rate of 18.6%, and its share in China’s export of services dropped to 21.5% from 23.5%. In the same period, China’s import of other business services went up at an average annual rate of 10.7%, with its share in China’s export of services felling to 11.2% from 17.1%.
Chinese mainland’s export of other business services was mainly directed to Hong Kong, the US and EU, which together accounted for two thirds (2/3) of China’s total export volume of other business services. EU, Hong Kong and the US were the first three sources for import of other business services, together accounting for about 60% of the total. In this sector, the surplus was mainly ascribed to Hong Kong and the US.
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