China's financial services a key sector to watch, says WTO chief economist
By Sim Sim Wissgott

The World Trade Organization's (WTO) annual report this year highlighted services as "the most dynamic component of international trade" and cited China as one of the countries seeing the fastest growth in that area.

However, barriers remain, including for women and micro, small and medium-sized enterprises (MSMEs).

Speaking to CGTN at the launch of the World Trade Report 2019's Chinese version on Wednesday, on the sidelines of the second China International Import Expo (CIIE) in Shanghai, WTO chief economist Robert Koopman identified Chinese financial services as a key sector to watch.

"There's a lot of opportunity in financial services in particular. China has a rapidly growing financial services capability. There's lots of reforms being discussed around that and experimentation around financial services in China. So I think that's really one of those places to watch," he said.

Other prime growth sectors include "business services, IT services - China has got a lot of strengths in those areas - (and) logistics services. I could go on, there's a long list of areas where China's really rapidly developed in the last 20 years, 30 years," he added.

For the second year in a row, the WTO has released a Chinese version of its flagship report, and this year's edition was "very timely, particularly for China," Koopman said at the launch.

"China is undergoing a massive transformation from an investment-and manufacturing-led economy to a services-and consumption-led economy," and the report can provide "a foundation, a good starting point" for China's services trade, he noted.

Amid massive growth worldwide - services now make up two-thirds of global economic output, two-thirds of jobs in developing countries and four-fifths of jobs in developed ones - barriers to trade in services still remain high and need to be lowered, the WTO report, which was released last month, urged.

"Right now, around financial services in China there are concerns about opening up the financial accounts and allowing the inflow and outflow. There have been new special economic zones that allow some experimentation around that. But it's very complex, these are very difficult regulatory environments and it takes a lot of research and understanding to know how particular mechanisms are going to work," Koopman told CGTN in Shanghai.

WTO Director-General Roberto Azevedo attends the launch of the Chinese version of the World Trade Report 2019 in Shanghai, China, November 6, 2019. /CGTN Photo

WTO Director-General Roberto Azevedo attends the launch of the Chinese version of the World Trade Report 2019 in Shanghai, China, November 6, 2019. /CGTN Photo

"(In) logistics services, China's been really innovative, particularly integrating ICT (information and communications technology). But specific reforms, those are things that are in the area of governments. Our job is to try to measure what kind of impact they have on trade costs going forward," he cautioned.

The World Trade Report 2019 emphasized that services can help women and MSMEs play a more active role in world trade, but that their participation remains limited. The WTO has been working on ways to improve that situation, Koopman told CGTN.

"There's a lot of efforts going on... trying to make sure that governments understand how slight differences in policy environments can affect the participation of micro, small, medium-sized enterprises and women."

"What we're trying to do is raise awareness that how you design your policies can make a difference in this area.... (and) make sure that members learn from one another's experience on how to design your regulatory environment that fits your needs as a country, but doesn't adversely affect the participation of women or micro, small, medium-sized enterprises."

The climate crisis is the hot-button issue of the moment and even trade can't escape it, with sectors like tourism and transportation bound to be affected by natural disasters and rising oceans, with routes and ports closed, and holiday destinations becoming undesirable, the WTO report also noted.

"Climate change is one of those things that's very very difficult, it touches on everything," Koopman said. At the same time however, these challenges will present a new opportunity "for environmental goods and services to be more traded and help countries meet the challenges of climate change."

(Video by Zhu Danni)