Tianmu News:

In recent years, the deficit of China's cross-border trade in services has continued to narrow. How are you responding to this? Will this deficit increase again in the future?

Wang Chunying:

Trade in services covers many aspects, such as logistics, tourism, intellectual property rights, product processing, financial services, computer information services, and other commercial services. Each kind of trade in services is affected by different factors and projects different growth trends. Since the outbreak of the COVID-19 pandemic, China's cross-border tourism has been primarily affected, but other forms of trade in services have recovered quickly. The prominent features are as follows.

First, the volume of China's cross-border trade in services has surpassed the pre-pandemic level. According to the balance of international payments, China's cross-border services trade balance in 2021 recovered to the 2019 level, and the figure climbed 26% year on year in the first quarter of 2022. Recently, the trade balance of tourism has rebounded due to the demand for overseas study and other factors. Other forms of services trade have also seen steady growth. The trade balance surpassed the 2019 level in 2020, registered a year-on-year increase of 41% in 2021, and continued to rise in the first quarter of this year.

Second, the services trade deficit has narrowed. In the first quarter of this year, the trade deficit of China's tourism sector amounted to $29.4 billion, up by 53% compared with the low level of the same period in 2021, but still lower than the $57.6 billion figure in the same period in 2019. Other services trade has reported a surplus for two consecutive quarters, with the figure in the first quarter of 2022 amounting to $12.8 billion. This is the main reason for the country's narrowing services trade deficit.

Third, China's services trade revenue has increased in recent years, reflecting relevant sectors' improved global competitiveness. China's logistics, computer information, and other commercial services have reported increased export revenue. Specifically, the revenue of logistic services started to grow rapidly in the second half of 2020. This is partly due to the high price of international logistic services. Meanwhile, it also showcases the achievements made by China's logistic sector, which has seized the development opportunities. In the meantime, with the integration of China's manufacturing and service sectors and the digital transformation of its service industry, emerging producer services such as those involved in the commerce and computer information sector is adding new momentum to China's services trade.

In general, the revenue and expense of China's services trade have shown a growing trend since the beginning of this year, with revenue increasing faster, further narrowing the services trade deficit. The development pattern of China's services trade will keep upgrading and changing in the next step. As China's services export competitiveness continues to improve, its services trade revenue will keep growing. Gradually, this will further affect China's services trade deficit.

That concludes my answer. Thank you.