Services Trade Restrictiveness

China has nominally implemented (USTR 2015, p. 26) most of its substantial GATS commitments. However, since these are limited as regards the commercial presence of foreign service providers on the Chinese market (mode 3), market access barriers persist including in the form of licensing, high capital requirements and foreign ownership ceilings, notably in the banking and telecommunication sectors.
Research in the telecommunications sector has established that China’s ‘minimalist’ or ‘creative’ implementation of WTO commitments has been facilitated by ambiguities in the GATS. As shown in Figure 3, China retains much higher trade restrictiveness levels than OECD countries across its service sectors. China’s slow progress in opening up its service industries has been attributed to their poor global competitiveness and market closure as a result of SOE monopolies or oligopolies.