Service exports industry crucial for trade relations

China-Europe trade tensions have occupied much of my thinking as a journalist lately. It is the kind of subject that can feel abstract and forbidding. Then it struck me: I had been part of this story all along, and still am.

I arrived in London as an international student in 2021, when Europe was still in the grip of the COVID-19 pandemic.

I remember the eerie silence of the international departures hall. It was almost deserted, apart from us — a small group of young faces wheeling carry-on suitcases toward the empty gates one by one.

Even at such an uncertain moment, we had chosen to set out and begin our studies abroad. For me, that determination was fueled by the prestige of British education, the allure of the culture and the promise of a new pattern of life.

In trade terms, this movement of students across borders constitutes the service industry. Tuition fees, together with spending on accommodation, food and local transport, are generally recorded by host countries as education-related travel services.

Tourism forms another large slice of services trade. One of the first things many of us Chinese students did after arriving in the UK was to try to make an appointment for a Schengen visa. Many of us lived out our dreams of traveling around continental Europe as it was only a short flight away.

This is just the tip of the iceberg when it comes to the opportunities the service industry offers for China-Europe trade relations.

Trade in services is largely intangible. They cannot be packed into containers and shipped overseas. For them to cross borders, providers and consumers must be brought together.

Services trade can therefore not only create economic exchange, but also human contact — and, potentially, greater mutual understanding.

Some of the most candid conversations that helped me make sense of Europe unfolded in pubs, restaurants and bus stops. They gave me insights into everything from subtle cultural nuances to the way people here perceived my home country.

As brief as our study programs were, a seed had been planted. Whatever paths we would later pursue, many of us came away with a desire to keep China and the West in conversation and, in our own small ways, help each side see the other more clearly.

Europe is likely to remain a popular destination for Chinese students due to its strong academic programs. Education, however, is only one piece of the puzzle.

Europe's deep and sophisticated services economy, which has considerable potential to export a diverse range of services — from finance and consulting to healthcare and culture — is poised to benefit as China places greater emphasis on enhancing household incomes and boosting domestic consumption.

My spending also told the other half of the story.

Throughout my nearly five years in the UK, I had packages shipped from China every two or three months, filled with things I could easily have bought here — from bedding, clothes and jewelry to ingenious little household gadgets.

I recently passed the habit on, showing a colleague how to have Taobao purchases forwarded to the UK. "I'm worried about my bank balance now," she joked. Everything was simply too cheap and too tempting.

The strengths are by no means confined to consumer goods. Having moved steadily up the manufacturing value chain, China is a major supplier of high-value capital goods, advanced technologies and green energy infrastructure.

The transformation rests on a well-established industrial foundation, reinforced by decades of strategic planning and sustained investment. Rome, after all, was not built in a day.

We could endlessly debate China's industrial policy, and the country's economy undoubtedly has challenges of its own to address.

But one thing is clear: trade flows where demand meets competitive supply. Just as European services find a growing market in China, Chinese goods find buyers in Europe.

And if Europe is serious about reviving its manufacturing competitiveness, it must devote far more attention to getting its own house in order.

Having written this far, I found myself searching for a neat conclusion.

For now, there may be no neat verdict on China-Europe trade ties anytime soon. Both sides are still working out how to live with each other's strengths, and any workable balance will take time.

The author is a correspondent at China Daily Europe based in London.

Contact the writer at zhengwanyin@mail.chinadailyuk.com