Closer service trade cooperation with China will provide the European Union (EU) a new impetus for economic recovery and growth, as China is eyeing more sustainable, higher-quality growth by unleashing the services sector in the country's 13th Five-Year Plan period (2016-2020), Chinese economist Chi Fulin has said.
Chi, president of the China Institute for Reform and Development (CIRD), a China-based think-tank, made the remarks here on the sidelines of a symposium Friday under the EU-China Reform Agendas, a project co-launched by CIRD and Brussels-based Center for European Policy Studies.
To further China-EU service trade cooperation, both sides should work to reduce trade frictions, speed up negotiation regarding the signing of Sino-EU Bilateral Investment Treaty and strive to sign the treaty within the year of 2015, he said.
The economist urged China and the EU to make best use of think-tanks in Free Trade Area (FTA) feasibility study, and make a breakthrough in the regard in 2015, thus striving to initiate FTA negotiations as early as 2016 and enter into a comprehensive Free Trade Agreement in an earlier manner.
CHINA'S ECONOMIC TRANSFORMATION
He said the upcoming five years is a critical period for China's transformation from a major manufacturing economy to a major service economy, saying the economic restructuring and reforms set for the period carries great significance for China's medium to long term sustainable economic growth.
Service sectors accounted for 48.2 percent of China's gross domestic product (GDP) in 2014, a ratio much lower than the average of 70 percent in developed countries, Chi said, expecting service sectors' contribution to China's GDP to rise to 55 percent by the year of 2020.
The transformation in China will unleash a potential consumption demand amounting to 40 to 50 trillion yuan (6.38 to 7.98 trillion U.S. dollars), providing an impetus of economic growth for the EU, China's largest trade partner for the past decade, according to Chi.
In 2014, the China-EU trade volume totaled 615.1 billion U.S. dollars, accounting for 14.1 percent of China's total trade volume and registering a 9.9 percent year-on-year growth.
China and EU accounted for one third of the total size of the world economy, but the volume of their bilateral trade is only 1.5 percent of the world's total.
Stressing that there is much room for China and the EU to expand trade and economic cooperation, Chi said that if the trade between the two economies grows at an annual rate of 9 percent in the next years, the bilateral trade volume will reach 1 trillion U.S. dollars in 2020.
He noted that between 2003 and 2013, the China-EU service trade registered an annual average growth rate of 17.4 percent, higher than the growth rate of the total trade between each other.