It is a great pleasure to address this important forum today. I would sincerely like to thank the Development Research Center of the State Council and the Beijing Municipal Government for the invitation.

The world today is facing a challenging period of overlapping crises. The COVID-19 pandemic remains a threat. Inflation has accelerated weighing on real household incomes and consumption. Governments worldwide are grappling with elevated debt levels and increasingly constrained fiscal policy space. Geopolitical tensions are also on the rise. These developments have also had an adverse effect on global trade.

While much of the recent attention has been on global trade in goods, trade in services has attracted less attention. This is somewhat surprising as services account for a significant share of trade in developed economies and play an increasingly important role for many developing economies as well. Services are less tangible, often require real time face-to-face interaction between suppliers and consumers, and are subject to complex layers of regulatory oversight. Statistics on cross-border trade in services are also harder to come by.

Nevertheless, trade in services is an important part of the global recovery from the pandemic. Over time advances in digital technologies, demographic change, urbanization, and rising incomes have brought new services into the world economy. Examples include legal, engineering, and other professional services. Services have been increasingly integrated into modern manufacturing and global value chains — research, development and design, finance, marketing, cross-border data flows and logistics. The so-called servicification of manufacturing has fueled a marked increase in embedded services inputs in manufacturing processes. Digital technologies, in particular, are likely to have a significant impact as they reshape business models. They allow firms to tap global markets and deliver services through new channels, reducing the need for face-to-face interaction.

These longer-term trends have been accelerated by COVID-19. The pandemic made face-to-face transactions difficult, hurting trade in traditional services such as tourism and transport. In 2020, world services exports declined by 19%. However, by encouraging firms and people to invest in digital technology and literacy, the pandemic has accelerated the world's digital transformation.

China is no exception to this trend of deepening services trade integration. The exports of commercial services were worth $280 billion in 2020, making China the world's fourth largest exporter. The country is also a major importer of commercial services. These reached $500 billion in 2020, the second highest level globally. Furthermore, modern services now comprise a significant share of China's export basket. Services that rely on remote delivery over digital networks expanded from 20% of total services exports in 2005 to 50% in 2019.

The digitalization of China's services sector was given a strong boost by the pandemic, which also prompted policy experimentation through the creation of pilot digital free trade zones. The development of China's services trade reflects the country’s status as the world's leading manufacturer, and the goods-services linkages that stem from China's manufacturing prowess. Still, China's transition towards a services-driven economy has some way to go. In particular, China still lags behind advanced countries in high value services not directly associated with manufacturing exports, such as professional and financial services. In many traditional services sectors, productivity levels are also relatively low, which leave scope for convergence.

Traditional services also dominate China's services imports. Travel and transport accounted for over 70% of services imports in 2019. On the positive side, this reflects the steady rise in the competitiveness of domestic services suppliers, and the related decline in the share of foreign value added in the country's gross exports. However, the relatively restrictive nature of China's services trade and investment regime, particularly for digital services, has also played a role.

This brings me to the policies that China can implement to accelerate the transition towards a services-driven economy.

First, lifting barriers on services trade and investment could boost innovation. China's market for services remains more protected than the OECD average. Services liberalization could enlarge the basket of competitive exports and imports, which will underpin China's quest for industrial upgrading, decarbonization and quality of life improvements.

Second, reducing trade barriers in services will require parallel reforms in regulatory governance. Curtailing regulatory uncertainty is often identified by both foreign and domestic investors as critical for sustainable business operations in China. Reducing the compliance costs associated with the country's governance framework for cross-border data transfers would open more opportunities for services exports and imports. Cross-border services trade is increasingly dependent on the ability to share job data with other jurisdictions promptly, efficiently and securely. China's current regulatory framework includes strict conditions for data flow across borders, adding substantial costs to cross-border digital services. Streamlined procedures for cross-border data transfers, and greater freedom for services providers to choose the location of their data storage and processing facilities would help reduce substantially these trade costs.

Lastly, reform efforts in services can also be pursued through multilateral and bilateral trade and investment agreements. China's recent trade policy initiatives — the Regional Comprehensive Economic Partnership (RCEP), and the application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — are important signals that services liberalization is high on the authorities’ agenda. China could also take actions to achieve the goal specified in the WTO services agreement that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.

Similarly, as countries move to tackle the impact of climate change, China could advocate for the resumption of WTO negotiations to lower tariffs on environmental goods and to extend such talks to a range of environmental services.

To conclude, services are increasingly important to trade in the post-COVID world. They are becoming both more tradable and more vital as inputs to traded goods manufacturing. Services will define the ability of countries and their firms to compete on the international markets.

At the World Bank, we aim to develop a deeper understanding of the challenges countries face with respect to the growing role of services, and also the best strategies to address these challenges. In this respect, we hope to learn from China's reform efforts. We also stand ready to support these reform efforts to help ensure their success.

Thank you very much!

Shanghai and other big Chinese cities, including Shenzhen, have ramped up testing for COVID-19 as infections rise, with some local authorities hastily closing schools, entertainment venues and tourist spots.

Infections have risen to the highest since August, with the uptick coming after increased domestic travel during the National Day "Golden Week" earlier this month.

Authorities reported 2,089 new local infections for Oct. 10, the most since Aug. 20.

While many of the cases were found in tourist destinations, including scenic spots in the northern region of Inner Mongolia, megacities that are often the source of well-travelled tourists have started to report more cases this week.

Shanghai, a city of 25 million people, reported 28 local cases for Oct. 10, the fourth day of double-digit increases.

Keen to avoid a reprise of the economically and psychically scarring lockdown in April-May, Shanghai said late on Monday that all its 16 districts were to conduct mass testing at least twice a week until Nov. 10, a step up from once a week under a regime imposed after the last lockdown.

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Checks on inbound travellers and in places such as hotels should also be strengthened, authorities said.

The expanding web of measures have already ensnared some.

Peter Lee, a long-time British expatriate, was out at lunch with his wife and seven-year-old son last week when he was notified his apartment block was to be locked down.

Lee and his son then checked into a hotel, which was soon also locked down, due to a prior visit by a virus carrier. Lee's wife, who was planning to join them, had no choice but returned home to be locked in.

"It might be that we say, we miss home and we miss mum too much and maybe we just go home and just deal with it," Lee told Reuters.

"We're monitoring the situation because it seems like Shanghai is gradually shutting down anyway and if everything starts to close then there won't be much benefit in being able to come and go."

'FINAL PRICE'

As of Monday, 36 Chinese cities were under various degrees of lockdown or control, affecting around 196.9 million people, versus 179.7 million in the previous week, according to Nomura.

In China's southern tech hub Shenzhen, where the highly transmissible BF.7 Omicron subvariant has surfaced, local cases more than tripled to 33 on Oct. 10 from a day earlier.

Inbound travellers will be subject to three tests over three days, authorities in the city of 18 million people said on Tuesday.

In the northwestern city of Xian, which reported just over 100 cases from Oct. 1-10, authorities halted offline classes at schools and closed many public spaces including the famous Terracotta Warriors Museum.

Daily shuttle buses ferrying tens of thousands of people to work in Beijing from nearby Tianjin and Hebei will be suspended from Wednesday due to the COVID resurgence.

Despite China's very small caseload versus the rest of the world, and the toll its counter-epidemic policies exact on the economy and population, the government has repeatedly urged people to accept the measures.

"Once a large-scale rebound occurs, the epidemic will spread, and is bound to have a serious impact on economic and social development, and the final price will be higher and losses will be greater," state-controlled People's Daily wrote in a commentary on Tuesday.

The COVID preventive steps come days ahead of a Communist Party congress starting on Oct. 16 where Xi Jinping is expected to extend his leadership. read more

"The latest resurgence of draconian COVID-19 restrictions is likely to be temporary given the priority to keep things under control ahead of the all-important meeting," said analysts from U.S. alternative asset management firm Clocktower Group.

"However, the People's Daily's tripling down on the zero-COVID-19 narrative is indeed a major concern, which suggest that a major policy recalibration may still be far away."

(This story has been refiled to restore dropped word in paragraph 6.)

Reporting by Ryan Woo, Casey Hall and Jason Xue; Editing by Raju Gopalakrishnan

‘Chinggis Khaan’ museum exposing 2,000 years of Mongolia’s history of kings, nobles, nomads people, and their statehood from the Mongol Empire to the beginning of the XX century, opened its door and held the Nine White Banners ceremony.

President of Mongolia U.Khurelsukh, Chairman of the State Great Khural G.Zandanshatar, Prime Minister L.Oyun-Erdene, the State Great Khural and the Cabinet members, Mayor of Ulaanbaatar, Embassies in Mongolia, notable people of politics, social and culture participated in this opening ceremony.

President of Mongolia U.Khurelsukh said, “We Mongolians should study and preserve the deeds of the Great Emperor Chinggis Khan and his successors, promote and spread them not only in our country but also in the world is a sacred duty that every Mongolian should cherish from generation to generation. I would like to express my sincere gratitude to the artists, painters, blacksmiths, builders, engineers and technical workers, civil servants, the Ministry of Culture, the administers and staff of the "Chingis Khaan" Museum, and to all people and organizations, who contributed to this historical development, on behalf of the people of Mongolia.”

The Cabinet of Mongolia issued Decree No. 280 on July 3, 2019, to construct the ‘Chinggis Khaan’ museum.

The museum has,

-Mongolia Ancient States (Hunnu, Xianbei, Juan);

-Ancient Nomadic States (Ottoman, Uighur, Hyatan);

-Great Mongol State;

-Mongol Empire;

-Chinggis Khaan origin kings and nobles (beginning of XIV-XX century);

-World and Mongolia Hall (Mongolian Pride Hall);

-Great Khaan’s Appreciation Urgoo permanent exhibits to present.

A museum that meets international standards is one of many works to promote Mongolian history and culture, develop tourist and cultural products, and educate the community.

‘Chinggis Khaan’ museum has about 12,000 cultural exhibits; 92% are original exhibits, and the rest of the exhibitions are copies of replicas and displays with official permission and certificates initially located in foreign museums, libraries, and archives. For example, the Hermitage Museum gave ‘A’ copies of the Stele of Chinggis Khan free of charge, copies of Kublai Khan's naval warships, and letters of emperors in the Vatican. The museum that meets international standards is setting a new standard for the Mongolian museum field.

‘Chinggis Khaan’ museum will open to the public starting tomorrow free of charge for children, elderly people, and people with disabilities. The museum fee for adults is MNT 30,000, for students MNT 15,000, and for families MNT 20,000. It takes an average of 5 hours for a museum display and 3.5 more hours for short movies and activities, and can be viewed with explanations in five UN languages by scanning QR code. The museum has an educational hall, a big and small auditorium for Meetings, a cinema, a souvenir store and a coffee shop.

A groundbreaking ceremony of the Chinggis Khaan Museum was held on April 1, 2020, and was accepted by the National Committee on September 29, 2021.

Australia’s TMK Energy has completed the exploration drilling programme at the Gurvantes XXXV coalbed methane (CBM) project in Mongolia, it said on October 11.

The fifth and final exploration well, Snow Leopard - 05R (SL-05R), intersected a total of 69 m of coal. TMK drilled five wells in the programme with a fifth added later. This well was respudded due to technical difficulties.

Preliminary results from desorption samples indicate that all coal from a depth of greater than 200 m contains moderate to high gas contents, TMK said.

“Drilling and testing for the 2022 exploration programme is now completed and the drilling contractors have been demobilised from the site,” the company said. “The focus will now shift to the advancement of the pilot well programme and the detailed planning and logistics that are required to deliver the proof-of-concept stage of the project, which will be to produce first gas to surface.”

TMK holds a 100% interest in the Gurvantes project. Fellow Australian energy company Talon Energy is earning a 33% working interest in the project under an existing two-stage farm-out agreement.

Mongolia has announced a national campaign to plant “Billion Trees” as part of a global green revolution to combat global warming and reduce the impact of climate change. Currently, 80% of Mongolian land has been affected by desertification. In order to achieve ‘Billion Trees’ goal, Mongolia needs to plant 150 million seeds every year between 2022 and 2030.

Within the framework of the “Billion Trees” national movement, a total of 120 million trees will be planted and grown in the capital city. However, many people are transplanting trees from the forest rather than planting new seeds. There are no guarantees that a tree will survive being removed from one location and transplanted elsewhere. Furthermore tree transplanting method can destroy forest eco system.

Therefore, Ministry of Environment and Tourism banned transplanting young trees from the forest until 1 January, 2030. Anyone who cut or transplants young trees from forest will be fined.

As of 2020, Mongolia has woods in 18321 hectares of area or 11.7 percent of Mongolian land; 7.9 percent of these are forest.

Mongolian Prime Minister L.Oyun-Erdene will travel to Germany for a first official visit after becoming the Cabinet leader in January, 2021. He will pay an official visit to Germany on 12-15 October, 2022 at invitation of Chancellor Olaf Scholz.

During the visit, PM to hold official meeting with Chancellor Olaf Scholz and discuss bilateral cooperation.

Also, L.Oyun-Erdene is expected to visit to the Mongolian Information and Trade Promotion Center in Europe as well as give interview to the Deutsche Welle, German public, state-owned international broadcaster.

The Government of Mongolia held discussions with the relevant authorities of the Inner Mongolia Autonomous Region of the People's Republic of China to increase the number of exports, thus, the exports are growing due to the measures that were jointly taken.

For example, 110 thousand coals were exported through Gashuunsukhait port on October 10, 2022. It is 25 tons more than the previous days’.

The National Council of Border Ports informed that a total of 911 trucks, such as 811 trucks of coal, 5 trucks of products, and 50 trucks of copper concentrate, went through Gashuunsukhait port at 5:00 pm on October 10, 2022.

As part of the ‘Revival of Ports’ of the 'New Revival Policy' implemented by the government, the country is focusing on increasing coal exports and working with the People's Republic of China.

Boeing Co. advanced after Mongolia’s national carrier operated the 737 Max jet in China, marking the first time in almost four years the model was used for commercial services to the country.

A MIAT Mongolian Airlines round-trip flight with passengers between Ulaanbaatar to Guangzhou landed in the southern Chinese city at 8:18am local time on Monday, according to FlightRadar24 data. MIAT Mongolian Airlines has the trip scheduled to fly again, using the 737 Max, on Oct. 17 and Oct. 24. Both are listed on the carrier’s website.

MIAT received all necessary permission in August to operate the Max into China, and no special permit was required for Monday’s flight, a spokesperson for the carrier said in an email. “The aircraft has undergone all of the work related to the safety bulletins issued by Boeing and authorities and is safe to operate,” the spokesperson said.

Boeing’s shares pared a gain of as much as 4.6% to trade up 1.9% to $132.19 as of 11:14 a.m. in New York. The stock is down about 34% this year.

The move is being closely watched as a potential signal the model may be closer to a return to service by Chinese carriers. Boeing officials met with China’s aviation regulator last month to review pilot training criteria for its Max jetliners, in a sign the planemaker is getting closer to securing all the necessary approvals to get the Max back up and flying in China -- the last remaining major aviation market not to permit its resumption.

“We continue to work with global regulators and our customers to safely return the 737 Max to service worldwide,” Boeing said in an e-mailed statement, declining to comment further.

China was the first to ground the Max in March 2019 and held off approving its return long after US regulators lifted a ban in late 2020 and Europe and other places followed in subsequent months. Returning the 737 Max to the skies in China and resuming deliveries are critical steps toward helping rebuild Boeing’s balance sheet, which was battered by the lengthy Max grounding and the Covid pandemic.

Chinese airlines haven’t flown the plane commercially since two fatal crashes involving the model in October 2018 and March 2019 in Indonesia and Ethiopia, respectively, that combined killed 346 people. Boeing has said it is diverting some 737 Max jes earmarked for China to other buyers.

The aircraft that operated Monday’s service to Guangzhou had been leased on a short-term basis to TunisAir this summer, and MIAT got it back last week, the spokesperson said.

By Danny Lee

— With assistance by Siddharth Vikram Philip