BEIJING: The American Chamber of Commerce in China has urged US service providers to take advantage of the Chinese economy's shift towards services.
The organisation's new Challenges and Opportunities in China's Service Sectors report highlighted the Chinese government's expressed willingness to develop the sector provides many opportunities for foreign investors, China Daily reported
Pointing to the free trade zones being opened up to foreign investment in the world's most populous nation, and the government's investment policy reforms, the report pointed out that investment in the service sector is growing in areas like Shanghai.
AmCham China also said it expected that growing demand for services would help more experienced foreign service providers to take the lead in market areas such as healthcare and logistics as well as spread best practice to local operators.
"The service sector in China is ripe for further development as we move to a more knowledge-intensive economy," said Gregory Gilligan, the chairman of AmCham China.
Services accounted for almost half of all foreign direct investment (FDI) into China from January to July with total FDI worth $35.64bn, a 15.78% year-on-year increase.
Yet the service sector only accounts for 46% of China's economy, compared with up to 80% in the US and other developed economies.
Gilligan said the Chinese government's current Five-Year Plan is committed to increasing the level to 47% by 2015.
Meanwhile, Wang Rongjun, a researcher from the Chinese Academy of Social Sciences, agreed that US service providers have maintained their competitive edge. "There are many opportunities for them to further dig out in the Chinese market," he said.
But AmCham China also referred to several obstacles to market entry, including irregular implementation of regulations, restrictive practices and discriminatory policies that favour local companies over their foreign counterparts.
Data sourced from China Daily; additional content by Warc staff