- Commercial services trade in Asia and the Pacific continued to be dominated by a few economies, namely China, Japan, India, Singapore, Republic of Korea and Hong Kong, China accounting for over 70% of total trade in the region. Trade in travel, transport and other business services, including professional and trade-related services, accounted for about 70%.
- Commercial services exports in Asia-Pacific region continued to outperform the rest of the world in 2019. However, the export growth in 2019 is expected to be cut in half from the nearly 10% growth in 2018, as a result of the global economic downturn and unresolved trade and political tensions.
- During the first six months of 2019, the region’s exports grew only 4.6%, while imports contracted by 2.8% compared with the same period in 2018. China – the largest exporter in the region – has experienced much slower growth this year. Moreover, available half-year figures for transport, travel, information and communication technology (ICT), as well as financial services, all point towards the decline of services trade across all sectors in the region.
- By slowing down trade in goods and related business activities, the tariff war between the United States and China has produced significant adverse effects in transport services, other business services and goods-related services trade between the two nations.
- Services trade in the region is also poised to weaken as a result of growing tensions within the region. The ongoing dispute between Japan and Republic of Korea has adversely affected their bilateral trade, such as in travel and transport services. Meanwhile, the political unrest in Hong Kong, China has had substantial impacts on the economy’s exports of travel and financial services – its main services exports. However, other economies such as Singapore and other financial hubs in China such as Shanghai and Shenzhen could benefit from this situation as redirected business and investment find their way across the region.
- Overall, services trade is expected to remain sluggish in 2020. However, the mid- and long-term prospects for ICT and business services remain bright: technological advances and mega-trends of global and regional economies will continue to deepen servicification, digitalization, and automation.