Today, the wto global trade outlook and statistics report forecasts that global trade in services will grow by 4 per cent in 2025 and 4. 1 per cent in 2026, down from 5. 1 per cent and 4. 8 per cent, respectively, of previous benchmark projections。
The report, published against the background of the recent tariff shocks to global trade by the united states, specifically mentions that, while trade in services is not directly affected by tariffs, it is equally affected by weak trade in related goods. At the same time, broader uncertainties have the potential to discourage travel and investment-related service expenditures。
In response, zheng wei, vice-researcher at the china service outsourcing research centre, stated that although the united states tariff was directly related to trade in goods, it might have a greater impact on trade in chinese services. China's enterprises in trade in services should look for an opportunity to boost domestic demand, optimize trade structures and reshape trade patterns in order to promote high-quality trade in services in china。
Impact geometry
The united states has an absolute advantage in global trade in services, with trade surpluses with almost all trading partners. According to the united states department of commerce, the surplus of united states trade in services increased to $29. 3 billion in 2024. Trade in services, especially subdivisions such as finance, law, recreation and high technology, has become an important manifestation of the strength of the united states economy。
This feature is also evident in trade in services between china and the united states. In recent years, trade in services has grown rapidly between china and the united states. According to the department of commerce, between 2001 and 2023, trade in services increased sixfold from $8. 95 billion to $66. 86 billion. According to chinese statistics, in 2023 the united states was china's second largest partner in trade in services; according to united states statistics, china was the fifth largest destination for services exports from the united states。
The united states is the source of the largest deficit in trade in services in china, with a general trend towards expansion in the size of the deficit. According to the united states department of commerce, between 2001 and 2023, united states exports of services to china increased from $5. 63 billion to $46. 71 billion, a 7. 3-fold increase; and the annual surplus of united states trade in services to china increased by 11. 5 to $26. 57 billion, up from $39. 7 billion in 2019. In 2023, china remained the largest source of surplus in united states trade in services, accounting for about 9. 5 per cent of total surplus in united states trade in services, and its deficit in trade in services to the united states was concentrated in three areas: travel (including education), intellectual property user fees and transport services。
“china's trade in services to the united states has been in deficit and has continued to expand. The steep rise in tariff barriers to trade in goods will have a direct impact on our transport and travel services, which account for half of our total imports and exports of services.” zheng wei said。
In the area of travel services, china's trade deficit against the united states of america is growing. According to united states department of commerce data, china visited the united states about 1. 1 million times in 2023, accounting for 14 per cent of total united states exports of services to china, and tourism, medical attendance and study are the main consumption items for chinese trade in services. Meanwhile, united states exports of travel services (including education) to china increased by 7. 8 times, from $2. 31 billion in 2001 to $20. 23 billion in 2023。
Zheng wei believes that if the united states tariff policy continues, china's business travel to the united states, such as investment, business negotiations, short-term employment and private tourism will be reduced. In march this year, united states congressman riley moore planned to introduce a bill called “stopccpvisasact” requiring a complete ban on chinese citizens from obtaining student visas to the united states. On 9 april, the ministry of education of china issued early warning no. 1 of 2025, stating that some states of the united states had adopted an education bill with negative chinese-related provisions that further restricted cooperation in higher education between china and the united states. Chinese students are going to study in the united states or will be affected。
In trade in services between china and the united states, the status of education services cannot be underestimated. An asian macro report released today by nomura securities mentions that in 2023, united states exports of education services to china accounted for 28 per cent of total education services exports. This has made an important contribution to the local economy of the united states. According to the national council for trade in america and the central african republic, both california, new york and massachusetts received more than $1 billion in income from chinese students。
According to zheng wei, while the taxation of services is not as direct as the taxation of goods, there are more hidden and post-border restrictions. Should the continued tariff escalation in the united states lead to a continued deterioration of trade relations between china and the united states, the potential impact on ict services, intellectual property and technology services and cultural and recreational services, which have a surplus advantage over china, could also have a negative impact on the continued growth of trade in chinese services。
How
How should china's trade in services respond to the many negative effects of recent united states tariff policies? Zheng wei expressed the view that life and opportunity were always shared. Trump’s indiscriminate application of tariffs to disrupt the international trade order will undoubtedly force china to accelerate domestic economic transformation, boost domestic markets, optimize trade structures, and deepen relations with other trading partners. In the long run, it is only at stake that china's trade in services can be promoted for high-quality development。
First, boost domestic demand and raise demand for tourism services. Domestic consumption is boosted and tourism services are powerful. On the one hand, we have made great efforts to develop our own tourism industry, speak the “china story”, raise the tourism economy to a strategic level, exploit tourism resources and bright spots everywhere, use new media tools such as the media and live platforms, and use the red-flow effect of the international network to focus on the “china story” on international and domestic platforms and build china's tourism brand. On the other hand, the tourism economy has led to the development of the relevant production capacity, the improvement of tourism support facilities, the upgrading of standards and quality of services such as accommodation, catering, guided tours and transportation, the development of cultural experiences of creative products and non-materials, the enhancement of the sense of access to tourism and the upgrading of the consumer demand of domestic and foreign tourists。
Second, optimizing trade structures and further increasing services liberalization. China's trade in services is large and weak, and the imposition of tariffs by the united states has forced china to accelerate the optimization of its trade structure and speed up the opening of services. On the one hand, attracting foreign firms to “go in”, reducing negative lists of access to fdi, negative lists of cross-border trade in services, negative lists of market access, truly achieving “access-to-facilities” and giving domestic fdi the same treatment, reducing hidden barriers to services and continuously optimizing the business environment. On the other hand, china is helping china to “go out” and strengthen the competitive advantages of chinese medicine services, cultural services, information and communication technology services, transport services and construction services. The project is based on china's overseas campus project, which encourages the development of integrated trade in investment by encouraging enterprises and industrial chains。
Third, to reshape trade patterns and deepen relations with trade partners such as the eu, asean, latin america, the middle east and africa. One is to accelerate the rcep upgrading negotiations, further reduce tariffs, facilitate trade liberalization and deepen trade partnerships with asean, korea and japan. The second was the resumption of negotiations with the european union on the comprehensive investment agreement for central europe to deepen cooperation between the two sides in the area of trade in services. The third is to accelerate negotiations on free trade agreements with the middle east, latin america, africa, etc., to promote foreign investment by enterprises and to achieve mutual benefits through exports of technology and services。
