Foreign firms see rosy prospects for services trade sector

Maersk Line, the world's largest container vessel operator by fleet size, isn't a company that people might expect to have sizable land assets in China, but Jens Eskelund, managing director of Maersk China Ltd, said the company will continue to invest in the land-side business in the country.

There is still room to improve on efficiency, develop logistics infrastructure and add new services at many of China's inland locations, Eskelund said, adding that the Danish company sees significant future development potential in the nation's services trade sector.

The company began operating its first automated warehouse with a local partner in Ningbo, Zhejiang province, in July and pledged to build more such service facilities across China.

Many of these opportunities come after China announced earlier this month that the country will import more than $10 trillion worth of services over the next 15 years. It also will continue to work on a negative list system for cross-border trade in services to support the global economy and promote opening-up in the services sector.

In addition to increasing services imports, China introduced 26 opening-up measures last month, including allowing foreign institutions to independently run economic and technological exhibitions, and providing support for more overseas professionals starting businesses in the country, to further spur innovation in the services trade.

Trade in services covers, among other sectors, commerce, communications, construction and related engineering, finance, entertainment, culture and sports, tourism, education and the environment.

China has become an important growth driver in world services trade in recent years. It has been the world's second-largest trader in services for six consecutive years, with its trade in services reaching 5.42 trillion yuan ($792 billion) in 2019, according to the latest data released by the Ministry of Commerce.

As China is further opening up its market to foreign investors by lifting entry barriers, business leaders said they hope the expanded pilot program will further promote cross-border investment in transportation, innovation, education, healthcare, finance and professional services.

Hironobu Taketomi, president of Fujifilm (China) Investment Co, said it is important for the Japanese company to find areas consistent with the national development direction, make targeted investments and promote the growth of business areas, especially in the field of trade in services.

For instance, China is playing a leading global role in the field of 5G technology, and Fujifilm is also committed to the development and production of advanced technologies and high-performance materials to promote 5G construction, he said.

Taketomi said Fujifilm will focus on integrating its medical diagnostic equipment and image processing technology with new technologies such as artificial intelligence and internet of things, in order to push forward the growth of intelligent medical services in China and help promote the Healthy China 2030 initiative.

Even though the COVID-19 epidemic has affected Fujifilm's business in the first quarter of this year, the overall effect on the Japanese company has been relatively minor, thanks to its diversified business scope. This includes medical equipment, such as endoscopy and ultrasound devices that are in great demand for pneumonia tests and treatment on the front lines, and display materials for tablets amid an increasing trend of working and astudying at home.

He said the company's sales have increased steadily in China with the improved epidemic situation since April.

Xian Guoyi, director-general of the department of trade in services and commercial services of the Ministry of Commerce, said that for the next step, the government will coordinate epidemic prevention and control with the development of trade in services, seize the opportunity to develop digital services trade and integrate services with the manufacturing industry, deepen the opening-up of the services sector, and promote the high-quality development of the country's trade in services.

After discovering that a number of cross-border transactions have taken place between domestic and international companies in the healthcare and financial sectors in recent months, Gavin Guo, an international partner of Shanghai-based Kewei Law Firm, said many cities and regions have also promulgated detailed policies and measures to attract and facilitate foreign investment from companies conducting services trade.

The expanded China (Shanghai) Pilot Free Trade Zone has continued to demonstrate flexibility and innovation in encouraging foreign investment in the services sector, he said.

Norman Sze, managing partner for government affairs at Deloitte China, said the accounting and professional services company has found strong growth potential in China's services trade market, particularly in the areas of digital economy, urbanization and coordinated regional development.

"It is fairly practical for the government to boost the country's fast-growing regions such as the Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta region and the Beijing-Tianjin-Hebei region to collaborate and support the growth of modern trade in services," he said.

To address today's uncertain global business and trade environment, Michelle Ho, president of UPS China, said the US company has launched a series of webinars around the Asia-Pacific region, including in China, to provide market insights and guidance to businesses on how they can navigate disruptions, including, for example, advice on how to diversify their supply chains or grow their digital capabilities.

"We are looking to share these valuable insights along with our solutions in our workshop sessions at the 2020 China International Import Expo," which will be held in Shanghai in November, she said.