Covid outbreaks and restrictions in China have hit the travel, construction and exhibition sectors, a senior economic official said on Tuesday.
Chinese companies are facing a combination of challenges to international services operations – Covid outbreaks have restricted mobility, while external demand has softened, the country’s Vice-Commerce minister said.
“Some services trade enterprises are facing challenges such as insufficient orders and rising costs, and their business expectations are unstable,” Sheng Qiuping said at a press conference ahead of the upcoming China International Fair for Trade in Services (CIFTIS).
“In particular, small and medium-sized enterprises, which have relatively weak abilities to ward off risks, are facing greater pressure to survive.”
Amid a sluggish global economic recovery, he said China’s services trade faces risks of declining external demand.
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The world’s second-biggest economy narrowly avoided contraction in the June quarter as widespread Covid lockdowns and the property crisis took a heavy toll on consumer and business confidence.
The People’s Bank of China on Monday cut its benchmark lending rates to revive the fragile recovery.
China will accelerate its pace of re-opening and promote a negative list for cross-border trade in services, Sheng said.
According to data by the State Administration of Foreign Exchange, the country’s services trade deficit reached $7.9 billion in June, the biggest since December 2021.
The government-sponsored CIFTIS takes place in Beijing from August 31 to September 5.
- Reuters with additional editing by Jim Pollard
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