In 2021, China's service trade deficit hit its lowest level since 2011. Why did the service trade deficit shrink significantly?

"In recent years, travel services have been the sector with the largest deficit in China's service trade. Since the COVID-19 outbreak, China's trade deficit in travel services has dropped significantly, from 1.494.16 billion yuan in 2019 to 643.04 billion yuan in 2021. This is an important reason for the sharp decline in China's service trade deficit." Gao Feng said.

Gao said that in 2021, moFCOM will earnestly implement the decisions and arrangements of the CPC Central Committee and The State Council, coordinate regular epidemic prevention and control with the development of trade in services, and work with relevant departments to promote the introduction of a series of policies and measures to stabilize trade in services. Trade in services continued to grow rapidly throughout the year, with total imports and exports of services reaching 5.298.27 billion yuan, and the deficit in trade in services narrowing to 211.27 billion yuan. This fully demonstrates the positive results China has made in restructuring trade in services and improving export competitiveness.

Gao Added that, in general, the major reasons for the sharp reduction in the service trade deficit, besides the sharp decline in the travel service deficit, also include the following:

First, the rapid growth of China's service sector has laid a solid foundation for the coordinated development of trade in services. According to the National Bureau of Statistics, the value-added of China's service sector grew by 8.2 percent year-on-year in 2021, accounting for 53.3 percent of the country's GDP. New drivers of growth are emerging in the service sector, and new forms and models of business are emerging. At the same time, the new generation of information technology has greatly improved the tradeability of services, the continuous integration of manufacturing and services, and the remarkable improvement in the quality and efficiency of service supply, all laying a solid foundation for the coordinated development of service trade.

Second, China's export competitiveness of knowledge-intensive services has significantly improved. COVID-19 has had a profound impact on people's way of life and work. Online provision and consumption of audio-visual services, medical care, education and online retail have increased significantly, and the extensive use of digital payment means has expanded the space for the rapid growth of trade in knowledge-intensive services. In 2021, China's exports of knowledge-intensive services will grow by 18%. Among them, the export of personal culture and entertainment services, intellectual property royalties, telecom computer and information services increased by 35 percent, 26.9 percent and 22.3 percent, respectively, showing strong export competitiveness.

Third, the export of transport services grew rapidly. Influenced by trade in goods and price factors, the export of transport services continued to grow rapidly throughout the year. In 2021, China's export of transport services reached 820.55 billion yuan, up 110.2 percent, making it the fastest growing sector among the 12 sectors of trade in services. Together with the export of knowledge-intensive services, the export of services grew by 31.4%, 26.6 percentage points higher than that of service imports, and the deficit in service trade dropped by 69.5% over the previous year.

Peak, according to this year, the Ministry of Commerce will be in accordance with the deployment of the CPC Central Committee and the State Council, adhere to the word pledge, seek improvement in stability, continue to promote the reform of trade in services, open, innovation, focus on the following several aspects work: one is to advance together with the relevant department to implement the "difference" service trade development planning ", implement the various tasks. Second, we will study and promote the introduction of a number of new policies and measures to vigorously promote high-quality development of digital trade, technology trade and foreign cultural trade. Third, we will explore ways of institution-based opening-up for trade in services and promote the introduction of a national negative list for cross-border trade in services. Fourth, we will continue to promote the implementation of policies and measures on the pilot projects for innovation-driven development of trade in services, and review and promote more achievements in institutional innovation. Fifth, select areas that have achieved notable results in the pilot program and upgrade them into national demonstration zones for innovative development of trade in services. We will vigorously develop digital trade, build demonstration zones for digital trade, and promote technological and institutional innovation. Sixth, we will improve the quality, upgrade and expand the export bases for featured services, improve the management and promotion systems for the bases, and implement policies and measures to support the development of the bases.