Trade in services experiencing exponential growth
Confidence in China's economic development and increasing openness rising
Visitors check out a colored lantern at the Sichuan province exhibition stand during the 2024 China International Fair for Trade in Services in Beijing on Sept 12. ZHANG WEI/CHINA DAILY
For Koh Poh-Yian, senior vice-president of FedEx Express and president of FedEx China, 2024 is undoubtedly shaping up to be a busy year.
The United States-based logistics service provider launched two new flights to the US from Qingdao, Shandong province, and Xiamen, Fujian province, in June, and expanded its fast cross-border shipping services for parcels heading to the US and Europe from China in July.
"This year also marks the 40th anniversary of our operations in China," said Koh. "Since 1984, FedEx has been committed to expanding its logistics network and service portfolio to support the growth of China's supply chain and trade in services."
In contrast to goods trade, trade in services refers to the sales and delivery of intangible services like transportation, tourism, telecommunications, advertising, education, computing and accounting.
With multinational corporations such as FedEx, Denmark's Maersk Line and France's CMA CGM Group all expanding their logistics capabilities in China this year, their expansion is reflective of a broader trend in China's trade in services, a sector that has experienced exponential growth.
In 1982, during the early stages of reform and opening-up, China's services trade had a total value of just over $4 billion. By 2023, this figure had jumped to $933.1 billion, a 233-fold increase, data from the Ministry of Commerce show.
As global value chains undergo restructuring, market watchers said that both Chinese and foreign companies are positioning themselves to capitalize on growing demand for services such as innovation, finance, logistics, marketing and branding.
Wang Xiaohong, a researcher at the China Center for International Economic Exchanges in Beijing, said China's continued efforts to expand its opening-up will position trade in services as a key engine for sustaining economic growth and cultivating new competitive advantages in the coming years.
China's dedication to enhancing the quality of its manufacturing sector is anticipated to boost demand for services in areas such as innovation, equipment maintenance, technical expertise, information, professional support and design, said Wang.
This will stimulate the development of new business models, industries and operational approaches, both domestically and globally, she added.
Shenyang North Aircraft Maintenance Co Ltd, a subsidiary of State-owned China Southern Airlines, is a typical example of a company benefiting from China's service trade growth, leveraging its expertise in auxiliary power unit maintenance to tap into new markets.
The Shenyang, Liaoning province-based aircraft parts maintenance and overhaul service provider saw its sales revenue from aircraft APU maintenance surge 15.9 percent year-on-year to 438 million yuan ($62.06 million) in the first eight months, marking five consecutive years of rapid growth, said Shenyang Customs.
"With a capacity to repair 245 APU units annually, we are able to provide services for six types of APUs, including those for Airbus A320 series aircraft and Boeing 737NG planes," said Wang Lulu, a senior engineer at Shenyang North Aircraft Maintenance. "Since 2022, we have serviced 36 APUs from countries and regions including Europe, the US and Southeast Asia, generating sales revenue of 123 million yuan. Our overseas maintenance services have emerged as a new growth driver for the company."