Innovative services deserve support

For new businesses to thrive, they need to be trustworthy, which is where government can play a regulatory, credit-enhancing role

Over the past couple of years, my son, who is now 9 years old, has made it a habit to demand spring outings. Usually, my answer is: "You need to wait for the once-a-semester trip your school arranges" or "Let's schedule a family picnic next week or the week after". For working parents in major Chinese cities like Beijing, such a reply is neither too cruel nor too kind.

This year has been different, however.

One day my wife came home with a tip from another parent about a small tour club for kids. She contacted the club through WeChat and immediately paid online for our son's trip. The following Sunday, our son joined a group of 20 kids of similar age led by five college-graduate club employees to ride locally rented bicycles in fresh air and sunshine at a forest park beyond the limits of urban Beijing.

I appreciated the great convenience the small tour club provided for urban parents like us, who pay close attention to their children's health and want them to spend as much time as possible in the lap of nature but cannot always afford the exhaustion of a family journey, which starts with planning and includes navigating Beijing's heavy traffic.

Despite the difficulties that have long hindered consumption growth in the world's most populous country, mushrooming new service providers driven by the internet have begun to demonstrate the tremendous potential of the service sector as the future driver of the Chinese economy.

Though most such new service-provider businesses still look miniscule compared with the struggling industrial enterprises that have to lay off millions of workers in the next few years to reduce overcapacity, they are not only creating new jobs and satisfying consumers, but also are positioned to take off with some timely help.

Another surprise I have come across is a new service I recently found while using an app on my smartphone to set an appointment with a doctor. After using the online registration system for one or two years, I was asked for the first time if I needed a professional assistant who would "accompany you through the entire hospital procedure for about 200 yuan a day". (That's $31 or 27 euros.)

Though I did not press the order button for myself, I still felt relieved thinking about the troubles my family had to overcome last year to accompany my father during more than two weeks at a hospital hundreds of miles away from Beijing where he underwent surgery. I have no intention of exaggerating the role of the new service. But the fact that patients can go through several departments of a hospital with relative comfort and save time as well should be a source of great relief for them and their families, as well as a much-needed boost to the overall efficiency of hospitals that have long been caught between understaffed medical professionals and ever-rising numbers of patients.

Yet for these new service providers to thrive, the typical question potential consumers will ask - "Can I trust them?" - needs to be addressed, and addressed soon. And this is exactly where the visible hand of the government can play a regulatory and credit-enhancing role.

Indeed, the proper government agencies should promptly regulate the fast growth of internet-based businesses. But it also would be good to see the government allocate a small part of the fiscal support for traditional service sectors to boost tourism or improve healthcare to support emerging new service-provider businesses - say, a 2 yuan subsidy for the 5 yuan insurance that a tour club will buy for each kid in a group - because it would considerably improve the creditability of these startups to tremendously boost consumption that, in turn, may earn more tax revenue.

In this sense, the boom of various internet-based service providers is an opportunity policymakers cannot afford to ignore.

The author is a senior writer with China Daily. Contact him at zhuqiwen@chinadaily.com.cn

(China Daily Africa Weekly 04/15/2016 page13)