Services upgrade needed to reduce long-term deficit

Source:Global Times Published: 2015-6-2 20:28:02

China had a goods trade surplus of $31.1 billion in April, but a $17.3 billion deficit for trade in services, according to data released Friday by the State Administration of Foreign Exchange.

Also, data from the Ministry of Commerce shows the country had a deficit in its services trade for 20 consecutive years from 1995 to 2014.

China can't be strong in trade over the long term if the country has a persistent deficit in its services trade. The current situation needs to be changed.

China needs to improve the quality of its products, in order to persuade overseas consumers to purchase Chinese products through major Chinese e-commerce platforms.

In the past, only rich Chinese people went shopping on overseas trips. But now, middle class Chinese are spending heavily overseas.

It's time to reduce the prices of imported products, particularly luxury goods, as it would encourage Chinese people to purchase imported products.

China has reduced imported tariffs for some goods like skin-care products and diapers, which shows that the regulators hope to boost domestic consumption by reducing taxes.

But the authorities still need to consider reducing consumption tax rates to reduce the prices of imported products.

Also, China should improve its domestic tourism services to attract more overseas tourists.

A country's image is reflected by the quality of the services it provides.

The author is Zhang Jingwei, a business commentator. 

Shanghai Securities News
Posted in: Mosaic

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