Visitors interact with a robot at a services trade fair in Beijing on May 28. Photo: IC

China's trade in services increased 3 percent year-on-year, reaching 3.6 trillion yuan ($505 billion) from January to August, official data showed over the weekend. An expert said the services trade deficit is expected to continue falling as China's services sector gains more international competitiveness.

The trade deficit has narrowed as exports increased 9.7 percent to 1.3 trillion yuan and imports dropped 0.3 percent to 2.3 trillion yuan in the first eight months of 2019, according to the Ministry of Commerce (MOFCOM) on Saturday. And the deficit in services trade dropped 117.5 billion yuan from the previous year to 1.05 trillion yuan. 

Exports of services accounted for 35.4 percent of the total services trade from January to August, representing a 2.1 percentage point growth year-on-year. The increase of services exports in August stood at 11.5 percent, higher than the previous seven months, MOFCOM said. 

The high-end services sector, including information services and business services, has witnessed booming growth. From January to August, trade volume in knowledge-intensive services increased 10.6 percent to 1.2 trillion yuan, 7.6 percentage points higher than the overall growth rate in the sector, accounting for 34 percent of total services trade. Personal recreation and cultural services, telecommunications, information and financial services enjoyed exceptionally high growth. 

The deficit in services trade with the US is also narrowing. According to statistics from the Ministry of Commerce of China, from January to September in 2018, services trade between China and the US totaled $94.83 billion, up 4.2 percent. China's exports to the US were $27.72 billion, up 17.7 percent year-on-year. Imports from the US dropped 0.5 percent year-on-year, reaching $67.11 billion. China's services trade deficit with the US was $39.39 billion, down 10.3 percent year-on-year.

Behind the growth in services trade is the growing services sector in China, Dong Dengxin, director of the Financial Securities Institute at the Wuhan University of Science and Technology, told the Global Times.

"There has been a deficit in services trade with the US for a long time because the US has more advantages in the sector, especially in higher-end services such as finance and high technology," Dong said. "But as the sector continues to grow, the trade volume of services, especially the export of services, is also expected to grow in the future, further narrowing the trade deficit."

Dong also noted that the growing proportion of services trade is a global trend. According to a report by the Xinhua News Agency, from 2005 to 2017, the percentage of services trade in the overall world trade volume climbed from 20.66 percent to 23.69 percent.