China to accelerate upgrading outsourced services sector

China will step up efforts to promote the transformation and upgrading of outsourced services, with the view to achieving better structure and higher quality of the services sector, the State Council’s executive meeting chaired by Premier Li Keqiang decided on Jan 3.

The Chinese government attaches great importance to the development of outsourced services. General Secretary Xi Jinping said that trade in services is increasingly becoming a vital part of international trade and a key area for economic and trade cooperation among countries, and thus has broad prospects and tremendous potential for growth. Premier Li Keqiang stressed the significance of growing high-tech and high-value-added outsourced services in advancing structural adjustments and driving industrial upgrading.

Data from the Ministry of Commerce shows a good momentum of growth in outsourced services. Between January and July last year, Chinese firms signed service outsourcing contracts worth 722.58 billion yuan ($102.62 billion), up 7.4 percent year-on-year.

"Developing outsourced services helps keep foreign investment and employment stable, and also contributes to economic upgrading. Though our country started relatively late in outsourced services, we have made fairly fast progress and have our own advantages," Premier Li said.

The meeting on Jan 3 decided on steps to build greater capacity in undertaking outsourced services at a faster pace as part of efforts to facilitate economic upgrading.

Information technology will be applied to promote "Services Plus". New service models such as crowdsourcing, cloud outsourcing and platform subcontracting, and new types of industry such as service-embedded manufacturing will be developed. Efforts will be made to enhance competitiveness in undertaking outsourced services in pharmaceutical research and development, design, accounting, and to strengthen the capability of contracting and delivering such services.

Service outsourcing will be gradually included in the "single-window" in international trade. In the service outsourcing demonstration cities, materials imported for service sectors such as research and development, design, testing and maintenance should be regulated as bonded goods on a trial basis.

"We must deepen the reform of government functions and further open up the outsourced services sector. A negative list for market access has been formulated. Areas not on the list should be opened up as much as possible, and government oversight needs to be accommodating yet prudent to meet the fast developing trend of the digital economy," Premier Li said.

The meeting decided to revise the catalog of key areas in outsourced services to promote upgrading toward higher value-added outsourced services and create more jobs for young people, college graduates in particular.

"We must promptly summarize the experience gained in the pilot programs and expand their coverage," Premier Li said.

"Good performance in outsourced services will also help build our domestic brands."