"Cost hike leave China no other choice but to accelerate its economic transformation from low-cost manufacturing to a high value-added service economy," said Yi.

Barriers to crack 

In line with its accession commitments on goods trade, China has significantly lowered its applied tariffs. In trade-weighted terms, the applied average tariff rate is about 4 percent, the lowest among all large developing countries and emerging economies.

By comparison, China's service sectors are granted much more protection, especially in finance, telecommunication, professional services and digital trade, noted Yi.

According to the latest service trade restrictive index made by the World Bank and the Organization for Economic Cooperation and Development, China's level of restrictiveness in services remains not only much higher than the average of developed countries, but also higher than that of many other developing countries, such as Brazil and Mexico.

In addition, "invisible" restrictions also hinder multinationals' operation in China.

Gregory Gilligan, chairman of the American Chamber of Commerce in China, said its member companies often complain of irregularly implemented regulations.

"Sometimes Chinese authorities favor domestic companies over their foreign counterparts. It is one of the key challenges," he said.

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