From "World's Factory" to "World's Office": China's Role in International Trade in Services

China is the largest BRICS economy and a key trading partner for many of the group's member nations. In 2025, it accounted for 19.7% of global GDP at purchasing power parity (PPP)—notably higher than any other BRICS country. Its trade weight is equally significant: in 2025, China's foreign trade reached 45.5 trillion yuan, with exports accounting for 27 trillion yuan and imports for 18.5 trillion yuan. The newly developed BRICS Trade Index reflects the growth of mutual trade between BRICS members and China. With a base value of 100 in 2009, the index had risen to 301.51 by 2024—a clear indicator of expanding trade ties and deepening economic integration within the group.

 

From "World's Factory" to "World's Office": China's Role in International Trade in Services

International trade in services remains the fastest‑growing segment of the global economy, and China is actively expanding its presence in this market. The service sector has become a key driver of the country’s economic growth, making a significant contribution to stimulating consumption, creating new jobs, and raising incomes. In 2024, the share of services in China’s added value reached 56.7 percent, and in 2023 services accounted for 45 percent of total employment. Moreover, the development of the service sector is important not only on its own but also for sustaining the competitiveness of China’s manufactured exports.

Despite significant structural changes, China’s role in international trade in services remains considerably smaller than in trade in goods. While the country accounts for 14.6 percent of global merchandise exports, its share of global services exports currently stands at 5.1 percent. The ratio of goods to services exports is heavily skewed toward goods, at roughly 8:1. China has a large surplus in goods trade and a deficit in services trade, maintaining its status as a net importer of services and a net exporter of goods.

The Chinese economy is characterised by the predominance of Mode 3 of service delivery— commercial presence. In 2022, this mode accounted for 63 percent of service exports and 69.1 percent of imports. The significant share of Mode 1—cross‑border supply—reflects China’s role as the "world's factory": logistics, maritime and air freight, and related transport and business services are generated within the framework of trade flows. Over the past three years, transportation, other business services, and tourism have consistently ranked among the largest sectors by share of the service industry. Notably, the marked increase in the share of exports of telecommunications, computer, and information services—to 16.9 percent—signals China’s growing position in the global information and communications technology (ICT) services market.

Contrary to the widespread assumption that manufacturing dominates, services account for the majority of both inward and outward foreign direct investment flows in China. More than two‑thirds of foreign capital entering China is directed toward the services sector, with leasing and business services, research and technical services, and retail and e‑commerce proving especially attractive to investors. According to the Revealed Comparative Advantage Index, China’s current specialisation in services is concentrated in construction, ICT, other business services, and transportation. By contrast, financial, pension, and insurance services; intellectual property payments; personal, cultural, and recreational services; and travel have not yet developed a clear comparative advantage.

China’s commitments upon joining the World Trade Organization spurred reforms aimed at market liberalisation and attracting foreign direct investment. At the same time, liberalisation of trade in services in China has taken the form not of deregulation, but of expanded market access and improved conditions for foreign service providers and investors. Despite its active integration into global value chains, China continues to maintain oversight of sensitive and strategic service sectors such as telecommunications, finance, and media.

Thus, China’s further progress in international trade in services will depend on the success of its financial and tourism sectors, as well as on increasing competitiveness in high‑technology segments of the service economy.