China Chart of the Week: Services Imports Reach New Highs
This week China’s State Administration of Foreign Exchange (SAFE) released the final balance of payment data for the second quarter of 2014. It is worth noting that China’s trade deficit in services of -$30 billion in the second quarter - when added to the -$33 billion deficit in the first quarter - means China’s trade deficit in services accelerated by 13 percent in the first half of this year. Chinese imports of services have accelerated rapidly in recent years, especially in tourism as Chinese find it increasingly easy to travel overseas. In 2013, China exceeded Germany to become the largest importer of services in the world after the United States with $330 billion in services imports. If China continues to enact structural reforms and relax barriers to foreign services to support growth in the service sector, imports of services are likely to expand, particularly from countries like the United States with a comparative advantage in service exports.