China Service Sector: Opportunities & Challenges Yang Li Yang Li Trade Representative Trade...
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Transcript of China Service Sector: Opportunities & Challenges Yang Li Yang Li Trade Representative Trade...
China Service Sector: China Service Sector: Opportunities & ChallengesOpportunities & Challenges
Yang LiYang Li
Trade RepresentativeTrade Representative
Embassy of Iceland, BeijingEmbassy of Iceland, Beijing
Controversies about ChinaControversies about China
China Miracle vs China CollapseChina Miracle vs China Collapse
China Threats vs China OpportunitiesChina Threats vs China Opportunities
1700 1820 1830 1850 1900 1950 1978 2000 2005 2010
40%
35%
30%
25%
20%
15%
10%
5%
0%
% of GDP
Opium War 1839-1842
Second Opium War 1856-1860
Invasion of Allied Armies 1900
Cultural Revolution 1966-1976
Opening-up & Reform 1978
Civil War 1945-1949
Japanese invasion 1937-1945
China Economic History in the WorldChina Economic History in the World
27 Peaceful Years of 9% Average Annual Growth
20-30 More Years of 8-10% Growth expected
China Economic GrowthChina Economic Growth
0
2
4
6
8
10
12
14
16
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
GrowthRate
Top 10 Economies 2006
02,000,0004,000,0006,000,0008,000,000
10,000,00012,000,00014,000,000
USD
Mill
ion
Top 10 Economies in 2050Top 10 Economies in 2050
USD BillionUSD Billion
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Ch USA Ind Jpn Br Russ UK Ger Fr I t
TopTop 10 Exporting Countries 200610 Exporting Countries 2006
0.00
200.00
400.00
600.00
800.00
1,000.00
1,200.00
USD Bilion
Top 10 Importing Countries 2006Top 10 Importing Countries 2006
0
500
1,000
1,500
2,000
2,500
USD Billion
Top 10 Trading Countries 2006Top 10 Trading Countries 2006
0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
3,500.00
USD Billion
China Foreign Trade 1978 - 2006China Foreign Trade 1978 - 2006
-200
0
200
400
600
800
1000
1200
1400
1600
1800
2000
US
D B
illio
n Export
Import
Balace
Total
Top 10 Service Importing Countries 2005Top 10 Service Importing Countries 2005
0
50
100
150
200
250
300
350
USD Billion
Top 10 Service Exporting Countries 2005Top 10 Service Exporting Countries 2005
0
50
100
150
200
250
300
350
400
USD Billion
Top Service Trading Countries 2005Top Service Trading Countries 2005
0
100
200
300
400
500
600
700
USD Billion
China Service Trade Balance China Service Trade Balance 1982-20061982-2006
-12
-10
-8
-6
-4
-2
0
2
4
USD Billion
Balance of Trade Service 2005Balance of Trade Service 2005
-80
-60
-40
-20
0
20
40
60
80
USD Billion
Service Sectors of Biggest ExportService Sectors of Biggest Export
0%
20%
40%
60%
80%
100%
1997 1998 1999 2000 2001 2002 2003 2004 2005
OthersTouri smTransportati on
China Service Trade: Sector Break-down 2005China Service Trade: Sector Break-down 2005
Export (USD Export (USD MMillion)illion) Import (USD Import (USD MMillion)illion)
BalancBalancee
All service sectorsAll service sectors 73,9073,9099
83,17283,172 -9,263-9,263
TransporTransporttationation 15,4215,4277
20.8720.87%%
28,44828,448 34.2034.20%%
--13,013,0
2121
TourismTourism 29,2929,2966
39.6439.64%%
21,75921,759 26.1626.16%%
7,5377,537
CommunicationsCommunications 485485 0.660.66%%
603603 0.73%0.73% -118-118
ConConstructionstruction 2,5932,593 3.513.51%%
1,6191,619 1.95%1.95% 974974
InsuranceInsurance 549549 0.740.74%%
7,2007,200 8.66%8.66% -6,650-6,650
Financial serviceFinancial service 145145 0.200.20%%
159159 0.19%0.19% -14-14
Computer and IT Computer and IT 1,8401,840 2.492.49%%
1,6231,623 1.95%1.95% 218218
Royalties & license Royalties & license feefee
157157 0.210.21%%
5,3215,321 6.40%6.40% -5,164-5,164
Consulting serviceConsulting service 5,3225,322 7.207.20%%
6,1846,184 7.43%7.43% --861861
Advertisement Advertisement 1,0761,076 1.461.46%%
715715 0.86%0.86% 361361
Movies,Movies, Audio & Audio & ViVisualsual
134134 0.180.18%%
154154 0.19%0.19% -20-20
Other Other business business servicesservices
16,8816,8855
22.8522.85%%
9,3889,388 11.2911.29%%
7,4977,497
China Service Trade – Growth Rate By SectorChina Service Trade – Growth Rate By Sector
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
1997 - 2005
All service sectors
Transporation
Tourism
Communications
Construction
Insurance
Financial service
Computer and IT service
Roylties and license fee
Consulting service
Advertisement and publicity
Movies,Audio & Visual
Other commercial services
Foreign Investment in Service SectorForeign Investment in Service Sector
0
5000
10000
15000
20000
25000
2003 2004 2005
US
D M
illio
n
Foreign investment in Non-Financial Sector
Foreign investment in Financial Sector
SectorSector Actual investmentActual investment(USD Million)(USD Million)
New Foreign New Foreign companiescompanies
Financial sectorsFinancial sectors 12,08112,081 1818
Total Non-financial Total Non-financial companiescompanies
11,67911,679 7,4457,445
- Commercial service- Commercial service 1,0781,078 2,5972,597
- Real Estate- Real Estate 5,3905,390 2,1202,120
- Transportation- Transportation 924924 8080
- Computer and IT- Computer and IT 928928 1,2951,295
Total service sectorTotal service sector 23,76023,760
Foreign Investment in Service Sector Foreign Investment in Service Sector 20052005
SectorSector Value Value (USD Million)(USD Million)
%%
Leasing and commercial serviceLeasing and commercial service 4,9424,942 60.8760.87%%
Wholesale and retailWholesale and retail 2,2602,260 27.8427.84%%
Transportation, warehousing and postal Transportation, warehousing and postal serviceservice
577577 7.11%7.11%
Science research,Science research, technical service and technical service and geological survey servicegeological survey service
129129 1.69%1.69%
Real Estate developmentReal Estate development 116116 1.43%1.43%
Other servicesOther services, including, including 9494 1.1.006%6%
- Public management and social - Public management and social organization serviceorganization service
1.731.73
- Resident service and other services- Resident service and other services 6363
- IT,- IT, computer service, softwarecomputer service, software 1515
- Water conservancy, environmental - Water conservancy, environmental and public facility managementand public facility management
0.130.13
TotalTotal 8,1188,118
China Investment Abroad 2005China Investment Abroad 2005
China Investment Abroad 2005China Investment Abroad 2005
61%28%
7% 2%1%1%
Leasing and commercial serviceWholesale and retailTransportation, warehousing and postal serviceScience research,technical service and geological survey serviceReal Estate developmentOthers
Great PotentialsGreat Potentials
Domestic Market:Domestic Market:
1. Market potential1. Market potential
2. Fast development2. Fast development
3. Minimum market share for foreign companies 3. Minimum market share for foreign companies
4. Wider market opening4. Wider market opening
China Foreign Reserve
0
200
400
600
800
1000
1200
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
USD Billion
Great Potential: International MarketGreat Potential: International Market
ObstaclesObstacles
Insufficient legislation: Monopoly & Insufficient legislation: Monopoly & governmental effortgovernmental effort
Sector and regional imbalanceSector and regional imbalance
Cultural factorsCultural factors
Long-term strategy: Fish-go vs Sow-harvestLong-term strategy: Fish-go vs Sow-harvest
The Diaspora
55 million people
GDP: USD 1000bn
The Coast375 million peopleGDP: USD 550 bn
The Hinterland580 million GDP: 400bn
The margins20 million peopleGDP: USD 110bn
The Rust Belt110 million people GDP: USD 120 bn
China multitude: the Very BasicChina multitude: the Very Basic
Opportunities & Challenges ?Opportunities & Challenges ?
Know the enemy and know yourself; in a hundred battles, you Know the enemy and know yourself; in a hundred battles, you will never be defeated will never be defeated ----Sun Wu,Sun Wu, 551 – 479 B.C. 551 – 479 B.C.
How much do I know about the sectorHow much do I know about the sector
Where are the customers & competitorsWhere are the customers & competitors
Do I have the resourcesDo I have the resources
Is it the right time Is it the right time
Do I have the time frameDo I have the time frame
……..
You Can Talk To UsYou Can Talk To Us