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

China's services trade has leapt forward with improvement in high-value added sectors, a decline in the services trade deficit and more openness amid China's ceaseless efforts to promote service trade innovation. 

From January to May 2020, China's knowledge-intensive services trade totaled $115.31 billion, a year-on-year increase of 4.7 percent, accounting for 43.3 percent of total services trade, as China deepens the services trade innovation development trial, data from the Ministry of Commerce (MOFCOM) showed.

Launched in 2016, the trial aims to promote economic transformation and bolster economic development and upgrading.

The trial was first conducted in 15 regions including Shanghai and Tianjin and then expanded to 17 other areas including Beijing and Xiong'an New Area in 2018.

The 17 pilot areas account for over 75 percent of the total services trade in the country.

Driven by the pilot, China's services trade has grown rapidly. Since 2016, China's annual service exports have grown at an average of 6.7 percent, 1.2 percentage points higher than global service exports and 4.3 percentage points higher than China's goods exports.

Services refer to the sale and delivery of intangible products such as transportation, tourism, telecommunications, construction, advertising, computing and accounting.

In 2019, China's trade in services totaled $785 billion, ranking second in the world. The service exports totaled $283.6 billion, up from fifth place in 2018 to fourth in 2019. 

The services trade deficit has dropped significantly. 

Since 2017, the growth in service exports has continued to outperform that of imports. The growth rate of service exports in 2019 was 9 percentage points higher than imports. The deficit fell by 14.1 percent, or $35.8 billion. 

From January to May this year the service exports fell by 5.9 percent year-on-year. The decline was 18.5 percentage points lower than for service imports. 

In terms of sectors, high-tech and high value-added service industries have surged, with fields such as big data, pharmaceutical research and development, bonded services, digital animation, space information, and satellite services becoming new growth points for service exports.

In 2019, trade in high-tech and high value-added service industries accounted for 34.7 percent of services trade, up 7.3 percentage points from 2016 when the trial was launched. Digital services accounted for almost half of the exports.

The government has also channeled more energy and effort into opening the services sector, with closer cooperation with Belt and Road countries. 

In 2019, China's services trade with Belt and Road countries totaled $117.88 billion, taking a larger share of China's total services trade, up from 12.5 percent in 2016 to 15 percent in 2019.

China has launched active opening measures in cross-border services trade, and has proposed six opening measures in the fields of finance, telecommunications, travel, engineering consulting and legal services, which strongly promoted the opening and development of related industries.

Preferential policies have also been rolled out at the national level, including an investment fund of 30 billion yuan ($4.2 billion) amid other fiscal, taxation and financial support measures aimed at facilitating the transformation of China's foreign trade patterns and fostering new growth momentum for the economy.