China says international services trade faces challenges

China says international services trade faces challenges
Containers are seen at the Yangshan Deep Water Port, part of the Shanghai Free Trade Zone, in Shanghai, China, on Feb 13, 2017. (File photo: Reuters/Aly Song)

BEIJING: China is facing growing challenges in international services trade as COVID-19 outbreaks curb mobility and softening external demand weighs on firms’ operating outlooks, the country’s vice commerce minister said on Tuesday (Aug 23).

Local COVID-19 outbreaks have restricted cross-border movement, hurting travel, construction and exhibitions, said Vice Commerce Minister Sheng Qiuping at a press conference.

“Some services trade enterprises are facing challenges such as insufficient orders and rising costs, and their business expectations are unstable,” Sheng said ahead of the upcoming China International Fair for Trade in Services (CIFTIS).

“In particular, small and medium-sized enterprises, which have relatively weak abilities to ward off risks, are facing greater pressure to survive.”

Amid a sluggish global economic recovery, he said China’s services trade faces risks of declining external demand.

The world’s second-biggest economy narrowly avoided contraction in the June quarter as widespread COVID-19 lockdowns and a property crisis took a heavy toll on consumer and business confidence. The People’s Bank of China on Monday cut its benchmark lending rates to revive the fragile recovery.

China will accelerate its pace of re-opening and promote a negative list for cross-border trade in services, Sheng said.

According to data by the State Administration of Foreign Exchange, the country’s services trade deficit reached US$7.9 billion in June, the biggest since December 2021.

The government-sponsored CIFTIS takes place in Beijing from Aug 31 to Sep 5.