At a State Council executive meeting on May 23, Premier Li Keqiang stressed the need to deepen innovation in the service trade sector in more pilot areas.

Developing service trade is instrumental in transforming China’s development model and achieving high-quality development in China, he said.

This is the second time within three days that Premier Li urged the opening-up in service trade, as he also called for efforts to further open up and stimulate the market while visiting the Ministry of Commerce and the General Administration of Customs on May 21.

He recalled the establishment of China’s first joint-venture hotel, the Jianguo Hotel, which was driven by the demands of tourism at that time. The following set-up of a series of joint-venture hotels has changed the situation of domestic hotel services. Along with visits by overseas tourists, it helped improved the domestic service sectors, the Premier said.

In 2016, a pilot program for the innovative development of trade in the service sector was rolled out by the State Council in 15 areas, including Tianjin and Shanghai municipalities. Currently, the service trade volume in these regions accounts for more than half of the total volume of the whole country.

“The pilot program was carried out well, and the experiences should be summarized and promoted, which would help expand opening-up and increase the global competitiveness of domestic service trade,” the Premier said.

He then mentioned a phenomenon many foreign tourists may encounter when traveling in China — given the rapid development of mobile payment, some street vendors and stores refuse cash payment.

“Don’t underestimate this small problem, as it will possibly undermine the image of Chinese tourism, which serves as an important window for opening-up,” the Premier noted, urging related departments to work out corresponding solutions.

It was decided at the meeting that the pilot program will be deepened in Beijing and 16 other areas from July 1, 2018, to June 30, 2020.

A series of opening-up measures will be introduced in key fields of telecommunications, tourism, engineering consulting, finance and legal services. Access mechanisms for trade in services on cross-border delivery and overseas consumption will be explored and refined. Restrictions will be gradually lifted or eased, and customs clearance and visa arrangements will be streamlined for freer flow of goods and people.

Trade in services in areas such as R&D and design, inspection and testing, international settlement and exhibition will be expanded. Tax exemption policies will be made available for service exports, and eligible exporters can enjoy zero tax rates. Exports of emerging services that are guided by Internet Plus will be encouraged, making trade in services a new highlight in China’s opening and development.

“Reform has always been connected with opening-up,” the Premier added. “The opening-up policy from four decades ago has driven China’s reform, while further opening-up is also required to upgrade China’s trade in services today.”