BOFIT Viikkokatsaus / BOFIT Weekly 2018/11

The OECD's Services Trade Restrictiveness Index (STRI), published annually, compares regulatory environment of services trade across 44 countries and 22 service sectors. The STRI considers e.g. restrictions on foreign entry, restrictions on movement of people, barriers to competition and regulatory transparency.

The just-released STRI reading for 2017 places Russia and China near the bottom, with India occupying the cellar. Most of the numerous service-sector restrictions in these countries focus on market entry of foreign firms. Especially Russia's weak performance, however, reflects largely general problems with its business environment, not just restrictions related to its service sector.

The service industries with least restrictions in Russia are legal and accounting services, whereas the most restricted ones are logistics and warehousing services. The OECD reports that restrictions on services in Russia have increased in recent years e.g. with the new law on storing personal information. In China, the least restrictions are imposed on architectural and engineering services, and the most on courier services and the media branch. According to OECD, China has reduced barriers to services trade in recent years, particularly with regard to rail freight.