China’s Preferential Treatment on Trade in Services: is the Sleeping Dragon about to Wake Up?

Abstract

This paper examines China’s specific commitments and rules on trade in services included in its Preferential Trade Agreements. The findings reveal that so far such agreements include only modest improvements compared with GATS. At the same time, the paper argues that structural changes in China’s economy and a conducive policy environment are likely to stretch China’s preferential treatment on trade in services in years to come. However, the paper warns that the dragon will remain particularly cautious to undertake new commitments that could limit its policy space to maintain its socialist market economy system, including disciplines on state owned enterprises, subsidies, competition and monopolies and exclusive service suppliers, data flows and regulatory coherence.