By H.E. Dr. Ali
Obaid Al Dhaheri
The rebooting of China’s economy continues with the launch of China International Fair for Trade in Services (CIFTIS) last week. Taking place from September 4-9, this was the country’s first major international trade event held offline since the start of the COVID-19 outbreak. The event in and of itself speaks volumes – attendance was in-person and the event was bustling and large-scale, with a variety of vendors. It speaks of a China that is advancing into a new normal and ready to evolve and progress.
The start of this decade has been extremely challenging for all of us, representing a black swan event. Such events can have surprising consequences and often shift expectations into a different direction. Certainly short-term, that is the case, however in the long-term we may find that China is not only going to continue on its track as a standard-bearer of the Asian century, but also move ahead more quickly.
This is evident as, although affected by COVID-19 and other factors, China’s services exports outperformed imports. The country’s export numbers totalled 1.09 trillion yuan from January to July, with only a slight decline of 1.4 percent on a yearly basis, and imports hit 1.53 trillion yuan, a drop of 22.8 percent.
When we look at China’s trade in knowledge-intensive services, which CIFTIS focuses on, the figure is 1.15 trillion yuan, up 8.9 percent year-on-year, accounting for 44 percent of the total services trade in January-July. The ratio is up 9.7 percentage points from the same period last year.
A standard-bearer for open economies
President Xi Jinping’s words at CIFTIS outlined a positive intention and a way forward. It represented a leader of a country offering a way ahead for China and for the world.
The UAE has benefited greatly from open, globalized trade. This is why we were encouraged by the words of Xi at the opening of CIFTIS, where he called for an “open, transparent, inclusive and non-discriminatory environment, concerted efforts of all countries to reduce border and behind-the-border barriers constraining the flow of production factors and to promote cross-border connectivity.”
The pandemic has set things into perspective and we have all been looking for hope, resolution and a way to move forward – China’s steady steering out of this crisis shows that the world is getting there.
Practical solutions offered by Xi in his speech, included that all countries should work together to break new ground in win-win cooperation, and the advocating by China for the establishment of an alliance for global trade in services. He also outlined that China would work with all countries in enhancing the protection of intellectual property rights and actively promoting the development of digital economy and sharing economy.
All of this is encouraging and there is a positive approach by China, which is similar to the open globalized system that the UAE has followed and has championed for the past many decades.
Trade in services aiding global dynamism
Trade in services records the value of services exchanged between residents and non-residents of an economy, forming part of GDP for exports, imports and net trade. Trade in services drives the exchange of ideas, know-how and technology.
For both the UAE and China, trade in services make up a significant part of the economy encompassing all manner of areas, including transport, travel, communications services, construction services, insurance and financial services, computer and information services, royalties and license fees, other business services, cultural and recreational services, and government services.
For China, the whole service sector of the nation is almost 50 percent of its GDP. This sector includes trades, retail, post, and many other industries. For the UAE, the service sector is predicted by the UAE Ministry of the Economy to expand 5.4 percent annually and be worth 236.8 billion dirhams by 2026, so driving forward this sector is fundamental to the UAE recovery post-pandemic in the short-term and this has crucially been prioritized through our economic vision in the long-term.
In the UAE Vision 2021, the UAE outlines building a sustainable and diversified economy, flexible in adopting new economic models, and capitalizing on global economic partnerships to guarantee long-term prosperity for current and future generations of Emiratis.
When we look at the advancement of trade in services, this is an essential element of the future economy that both the UAE and China are geared toward. The driving forward of this sector at this time will be a boon for the world and a benefit for economies. China is injecting much-needed vitality and it is to be welcomed. For instance, from 2018 to 2022, China is expected to import services worth $2.5 trillion and thus contribute to more than 20 percent of global service import growth.
The UAE, too, is driving forward its own plans to recover, as recently, outlining a 33-initiative plan. The aim is to enhance our nation’s partnerships with stakeholders, further develop economic sectors, support the private sector and create solutions to existing and potential challenges. The plan covers development of all sectors including trade in services, and ensures stimulation of trade, enhanced flexibility of financing activities, increased productivity, support for digital transformation, acceleration of green economy growth and enhanced food security.
Bilateral cooperation and trade forms an essential element of our recovery, and we are pleased to be working with all global partners, including China through events such as CIFTIS, on an open, globalized world with shared economic benefits for all.
–The Daily Mail-China Daily News Exchange Item
