China's economic planners aim to boost service exports

BEIJING (Reuters) - China has set a target of reaching US$1 trillion (S$1.25 trillion) worth of trade in services by the year 2020, according to a newly released economic planning policy paper that emphasised a shift away from the export of goods.

The State Council, China's cabinet, said in a document released on Saturday that it would provide total policy support to raise the export value of services relative to goods.

The document represented the first instance of China's government outlining an effort to boost service exports as a national strategy, according to a state television report on Saturday.

"Our country's service exports have risen quickly in recent years but still lack competitiveness internationally," the State Council said in the paper dated January 28.

The document targeted the expansion of financial services, communications and transportation into international markets as well as promoting tourism and the cultural export of media and "central Chinese values."

The document also proposed tax breaks on service exports and encouraged companies to apply for more patent applications in foreign markets.

China's leaders have been seeking for years to guide the country away from an economic model based on exporting low-value goods and towards one based on domestic consumption and the production of higher-value goods and services.

In 2013, China's total imports and exports of services amounted to US$539.64 billion.

Chinese trade in recent months has slumped amid the slowest economic growth in 24 years. During 2014, China's total trade value increased by 3.4 percent from a year earlier, short of the official target of 7.5 percent.

Growth in outbound direct investment has remained strong as cash-rich Chinese companies continue to acquire assets overseas while the domestic economy cools.

The Ministry of Commerce said last month foreign direct investment in 2014 rose less than 2 percent to reach US$119.56 billion while outbound capital flows surged 14 percent to nearly US$103 billion.