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MOFCOM Press Conference on Pilot Program of Comprehensively Deepening Innovation and Development of Services Trade

21st Century Business Herald: What are the highlights of this round of pilot program compared with the previous ones?

Xian Guoyi: Starting 2016, the first round of pilot project focused on introducing fiscal, tax, financial and facilitation measures and the second made breakthrough in opening up with six measures on opening up and facilitation and 34 policy supports. The latest pilot program goes deeper across the board, with more highlights on reform at a deeper level, high-quality opening up and all-round innovation. Policies and measures will be more intensive and extensive. There are 80 more new measures than in the last round. The quality of new measures is enhanced in the sense that there will be much greater opening up, policy support and reform.
All in all, this round of pilot project pays more attention to promoting services trade in the context of national development strategy. There is structural arrangement for the scope of the experiment and differential explorations. A series of measures are introduced for industrial chain development in such regions as the Beijing-Tianjin-Hebei, the Yangtze River Delta and Guangdong-Hong Kong-Macau. It also attaches more importance to improving the institutional framework for services trade as China deepens reform comprehensively. For instance, we will further advance the reform of government functions and optimize administration and supervision, among other institutions and systems for trade in services with a view to unleashing market vitality. It also aims to make our services sector more competitive as the country opens up wider to the world. We will further expand the scope of opening up, explore new systems at a faster pace, and optimize the business environment favorable to opening up and growth. Last but not least, it gives more weight to stimulating the growth drivers and seizing the opportunity of digital trade. We will expand the scope of services trade, improve its structure and lift the quality and promote digital trade in the pilot areas. While relaxing control and easing access, we will also explore better regulation and compliance mechanism. Thank you.

China Business News: What new measures are introduced in the pilot areas on removing or easing restrictions on services trade? What will be done specifically regarding the stress test for emerging services trade, and easing or removing restrictive measures in an orderly fashion?

Xian Guoyi: I’ve touched upon some restrictive measures to be eliminated or eased as well as new opening up measures in my introduction to the overall plan. Let me say more about opening up.
Opening up more services sectors is an important exploration in this round of innovation experiment. The Fourth Plenum of the 19th CPC Central Committee made clear that we should expand, enhance and upgrade opening up across the board, further open up manufacturing, services and agriculture, and promote institution-based opening up including rules, regulations, administration and standards. This year’s Report on the Work of the Government said that China will publish the negative list for cross-border services trade.
It is against this backdrop that we give priority to opening up in this round of pilot program. We should open up more sectors in an orderly manner and eliminate or ease restrictive measures in services trade in the principle of pursuing opening up in both factors of production and institutions, coordinating opening up and regulation and combining pre-establishment services and compliance oversight. We will explore new ways of institutional opening up through stress test of emerging services sector opening up in pilot regions.

Focusing on these areas for exploration, we have proposed 26 opening up measures with relevant departments, which could be divided into three categories: First, open stress tests for cross-border supply (model 1) and consumption abroad (model 2), such as working to allow foreign institutions to independently hold foreign-related economic and technological exhibitions, act as operating non-vessel carriers in China without being a Chinese enterprise legal person, and support cooperation with overseas institutions to develop cross-border commercial medical insurance products. Second, explore the relaxation of restrictive measures in specific service sectors for the movement of natural persons (mode 3), promote mutual recognition of professional qualifications, and help overseas professionals come to China for innovation and entrepreneurship. For example, launch pilot programs that allow qualified Hong Kong and Macao professionals to provide engineering consulting services in pilot areas such as Hainan, Shenzhen and Guangzhou; carry out pilot programs for mutual recognition of professional service qualifications with Hong Kong and Macao; explore the integration of foreigners' work permits and residence permits for workers; and help foreigners come to China for work. Third, after opening up of the three modes above, we will further enhance the effectiveness of opening up and encourage the pilot areas to strengthen international cooperation in service trade, such as actively promoting international cooperation in education, law and finance, and building international parks on service trade cooperation.
Some of these measures have been promoted in all pilot areas, and some have been launched first in some qualified pilot areas, reflecting the content of stress testing. After evaluation, the qualified measures can be extended to all pilot areas and even the whole country. Thank you!

Gao Feng: The floor is open.

Phoenix TV: Since the outbreak, the cross-border movement of people has been blocked, and the import and export of travel services worldwide has been greatly affected. How do you view the development prospect of service trade this year? What new opportunities will the Program bring to the development of service trade?

Xian Guoyi: Since the beginning of this year, the global outbreak of COVID-19 has greatly influenced the service trade. In the first half of the year, the scale of China's service trade decreased, but it showed a steady trend on the whole, with resilience and vitality for development. The service export performance was significantly better than that of import, and it was also better than that of other major service exporters, as the export of knowledge-intensive services grew against the trend in particular. The growth rate of emerging services export such as intellectual property royalties, insurance services, telecommunications and information services were all above 15%, and the overall decrease in service export was 19.5 percentage points less than that of import, driving service trade deficit down by 46.1%, or RMB 344 billion year-on-year.
At present, the domestic epidemic prevention and control has made great strategic achievements, but the overseas epidemic is still spreading, world economy seriously declining, and international demand shrinking sharply. The conditions for the development of China's service trade in the second half of the year is still complicated and difficult. However, we should also see that the epidemic will have a far-reaching impact on the global service trade pattern, consumption patterns and consumption habits. The development of service trade finds opportunities in difficulties and the competitiveness of China's service trade is constantly improving. Such long-term positive trend remains unchanged.
The comprehensive and deepened pilot program will bring at least three opportunities: First, market expansion opportunities. Comprehensive expansion of opening up will help form a large market, promote the formation of a new development pattern centered on "internal circulation," and speed up a "dual circulation" growth model in which "internal circulation" and "international circulation" promote each other, and create a broader market space for domestic and foreign service-providers. Second, there are opportunities for innovation-driven development. The export of emerging services such as digital trade, copyright trading and online education has become a new area of growth. Producer services are more closely and efficiently embedded in the global industrial and supply chains through offshore outsourcing, bonded R&D and bonded detection, attracting domestic and foreign resources and factors to further devote to new business models. Third, international cooperation opportunities. The pilot program provides more space for China to deepen service trade cooperation with BRI and other partners. It is fair to say that the pilot program will not only promote the high-quality development of China's service trade, but also create new momentum for the development of global service trade. Thank you!

China News Service: We have noted that the newly added pilot areas for innovative development of services traded are mainly concentrated in the central and western regions. What are the considerations behind that? What measures will MOFCOM take to promote the development of services trade in the central and western regions in the future?

The newly added pilot areas in the central and western regions and in the old industrial base in the northeast take up half of the total, a share that is higher than the two batches of pilot projects announced previously. Such a layout is devised to implement the national development strategies such as high-quality development of BRI, developing the western region and revitalizing the northeast. In addition, services sector and trade in services in the central and western regions are growing at a faster pace in recent years, creating foundations and conditions for institutional innovations. Experience accumulated here are better suited for these regions to draw upon. We hope these pilot areas could guide and lead the development of services trade in the central and western parts and bring the overall development of services trade in these regions to a new height.

Moving forward, we will place more focus on developing trade in services in the central and western regions by stepping up support. We will map out concrete and feasible implementation plans based on the industrial characteristics and geographical advantages of these pilot areas, cultivate new competitive edges in production-related services such as digital trade, transportation, tourism, culture, traditional Chinese medicine and service outsourcing, so as to further economic transformation and regional coordinated development. Thank you!

In the interest of time, we will take the last question.

Economic Information Daily: What will MOFCOM do to comprehensively advance the pilot work for innovative development of services trade? What roles will relevant government departments and local authorities play respectively?

The pilot projects is a systematic task that requires authorities to follow the instructions of the State Council to ensure coordination and interconnection between different departments and perform their duties and forge synergy.

On coordination, following the instructions and task assignment by the State Council, relevant government departments would strengthen coordinated guidance and policy support for the pilot projects, take the initiative to lead opening-up endeavor, push forward explorative efforts, innovate policy instruments and formulate policy measures according to the overall plan. MOFCOM will further enhance coordination, supervision and assessment, work vigorously to promote the work in the pilot areas, ensure the accomplishment of tasks and work with relevant departments to summarize and scale up exemplary practices.  

On interconnection, the people’s governments (administrative committees) of pilot areas that assume primary responsibility for the pilot projects are in charge of implementing and promoting relevant measures, carrying out comprehensive coordination and policy coordination, providing organizational guarantee and fulfilling every pilot task specified in the overall plan, in a bid to explore a new path for the innovative development of services trade of the whole country. The provincial governments of the pilot areas are responsible for strengthening coordinated planning, supervision and guidance for the work of pilot areas. First, with regards to strengthening coordination, the provincial governments need to enhance planning for the development of services trade in both the pilot areas and the provinces (autonomous regions and municipalities), roll out key programs first in the pilot areas, and promote the pilot practices starting within their own provinces (autonomous regions and municipalities). Second, with regards to enhancing guidance, the provincial governments need to work with the pilot areas to jointly draft implementation plans for comprehensively furthering the pilot projects and submitting them for approval. The governments at provincial level should also provide guidance and assistance to resolve any issues and difficulties arising while implementing pilot programs. Third, with regards to stepping up supervision, the provincial governments should examine how the pilot tasks are carried out, identify and report key issues in a timely fashion. Fourth, with regards to intensifying guarantee, the provincial governments should earnestly assume duties to approve administrative matters in the service sector delegated to the provincial governments, introduce policies to facilitate pilot programs and create favorable institutional and policy environment for pilot areas. Thank you!

That’s the end of today’s press conference. Thank you, Director General Xian Guoyi and all the friends from the media. Thank you all!