Beijing to review opening of service sector

PUBLISHED : Thursday, 09 September, 2010, 12:00am
UPDATED : Thursday, 09 September, 2010, 12:00am

Beijing will study whether to further open the nation's service sector, including some industries not covered by its World Trade Organisation commitments, a senior official says.

Zhang Xiaoqiang, a vice-chairman of the National Development and Reform Commission, also said in a statement that various government departments would improve the efficiency of their investment approval process and do more to protect intellectual property rights.

Zhang's statement, posted on the NDRC's website, was in response to the European Union Chamber of Commerce's complaint last week that the mainland had an 'excessively' regulated market and had become less open to competition even after 30 years of reform.

But Zhang did not specify which new service industries would be added to the country's WTO commitments, saying 'that will be done according to the development of the market'.

Global investors have long urged the mainland government to further open its financial, transport, logistics and distribution, telecommunications, education, tourism and professional service industries.

An analysis posted on Australia's Department of Foreign Affairs and Trade website said China's service sector grew strongly in the 1990s, but an efficient and competitive service economy had yet to emerge.

A report by the EU chamber earlier urged that the mainland's trade barriers should be torn down in the telecommunications industry, the airline computer reservation sector and the wholesale petroleum product business.

Criticism that the opening of the financial industry was getting worse was a misunderstanding, Zhang said, adding that other comments were not objective.

Yi Xianrong, a researcher and economist at the Chinese Academy of Social Sciences, also refuted criticism about the mainland market, saying it was certainly open but its pace of opening might not be as quick as global investors wished.

Beijing announced plans to develop the service sector and expand its role in the nation's economy in its 10th five-year plan to 2005 after it gained full membership to the WTO in December 2001.

But global investors said the country's commitment to market access was being undermined by administrative measures. In addition, they said the mainland's opaque regulatory process and clumsy operating requirements frustrated foreign service providers.

After being hit by the global economic crisis in 2008, the central government said it planned to shift its export-oriented economy to one dominated more by domestic consumption.

The United Nations Conference on Trade and Development said earlier China still topped the list of foreign investors, followed by India, Brazil and the United States.

China's foreign direct investment amounted to US$90 billion last year, down 2.6 per cent from 2008 because of a decline in investment appetite amid a weak economic environment.