China expects its trade in services to achieve robust growth by 2010, with annual increases of around 20 percent expected over the next five years.

The Ministry of Commerce set the target in its 11th Five-Year Plan for the country's commerce development between 2006 and 2010, the first time the plan has highlighted this field.

The plan said service imports and exports would grow at an annual rate of 20 percent to US$400 billion in 2010, while the structure of service exports would be improved.

A ministry official said China's trade in services lagged behind its trade partners when compared with its cargo trade.

China's trade in services only accounts for a quarter and less than half of the United States and Germany respectively, although China's cargo services account for 56 percent of the United States' and 82 percent of Germany's.

The official added that the country's current trade in services largely relies on traditional sectors, such as tourism and transportation services, which account for over half of the country's total service exports.

"So it is a new task for the country to promote and diversify the trade in services," he said.

In order to achieve the five-year target, the ministry will issue a detailed programme for the development of China's trade in services, while also conducting research and attracting more international service businesses to the country.

The plan also revealed that the country wants to achieve a balance in its foreign trade by 2010.

It said imports and exports are targeted to grow at around 10 percent year-on-year over the next five years with total imports and exports hitting 2.3 trillion U.S. dollars in 2010. Imports and exports will realize a basic balance.

China posted a record trade surplus of 94.66 billion dollars in the first eight months of the year.

Acknowledging the problems resulting from the current trade imbalance, the central government has pledged to correct it by slowing down export growth in labor and energy-intensive products and restricting processing trade exports.

Meanwhile, the authorities are keen to attract more foreign direct investment between 2006 and 2010, with foreign investment's efficiency improved and its innovative capacity boosted.

"Foreign investors are expected to invest more in key sectors such as infrastructure, agriculture, technology and services. Central, western and northeastern China are expected to attract more foreign investment in the next five years," the plan said.

The ministry also set a target of 60 billion dollars for outbound investment over the period.

China's total outward investment currently accounts for just 0.59 percent of the global total.

During the next five years the government will support domestic enterprises in setting up factories and plants in foreign markets by establishing some overseas "economic and trade co-operation zones" with complete infrastructure and industrial chains.

"Enterprises are encouraged to build research and development centers and invest in technology-intensive countries and regions," the official said.

Meanwhile, the target for the country's retail sales is around 11 percent annual growth over the next five years, to level off with the growth rate in the 10th Five-Year Plan (2001-05) period.

(China Daily October 12, 2006)